BMO Capital has kept its market weight stance on the global travel industry for 2026, pointing to ongoing uncertainty and pressure on the average consumer together with an uneven base of customers.
According to the firm, travel demand remained healthy through the first half of 2026, though the strength was concentrated largely in higher-end market segments. In contrast to that headline resilience, the firm noted a weakening in U.S. inbound travel: growth in that category turned negative in April 2026 and continued to decline through the second quarter of 2026.
Air travel data offered further cautionary signals. BMO observed that global air passenger traffic declined for the first time since the pandemic and that U.S. air traffic saw a slight decrease over the same period.
Lodging results presented a more positive picture. Average occupancy increased in the second quarter of 2026, and average daily rate growth roughly doubled versus the first quarter of 2026, reflecting some improvement in hotel revenue metrics even as broader demand patterns showed divergence.
On individual securities, BMO Capital reaffirmed its outperform rating on Booking Holdings (NASDAQ:BKNG) and kept a $240 price target. The firm described Booking as the highest-quality name within the sector, citing favorable geographic exposure and growth in alternative accommodations as factors supporting that view.
For other online travel agencies, BMO maintained existing ratings, estimates and price targets for Airbnb (NASDAQ:ABNB), Expedia (NASDAQ:EXPE) and TripAdvisor (NASDAQ:TRIP). The firm said it will wait for observable signs of demand improvement before adopting a more constructive stance on these OTA names.
The assessment from BMO underscores a split market where lodging and premium travel segments show pockets of strength while broader inbound and air-travel measures have softened. The firm’s positioning reflects a cautious approach until demand trends become more uniformly positive.