Why Frank Holmes Says Travel Demand Won’t Quit Despite Geopolitics and High Fuel Prices

Frank Holmes sees no slowdown in sight for global travel. The CEO of U.S. Global Investors made that clear in a recent interview. Consumers keep booking flights and hotel rooms. Airlines and luxury properties pocket the gains even as oil prices climb and conflicts flare in the Middle East.

Holmes joined Steve Darling on Proactive Investors this month to lay out his case. Travel demand acts as a powerful tailwind. It helps carriers and hotel operators overcome higher fuel costs and geopolitical uncertainty. The conversation, available on Proactive Investors, captures a sector that has rewritten expectations since the pandemic.

Air Canada offers a prime example. The carrier manages elevated fuel prices while passenger numbers stay high. Holmes pointed to its strong performance as evidence that disciplined capacity and steady bookings deliver profits. But the story stretches far beyond one airline.

Travel out of Dubai has rebounded roughly 30 percent. That surge signals broad appetite for both leisure and business trips. Consumers refuse to stay home. They accept higher costs. They adjust routes when needed. The result? Record international arrivals and pricing power across the board.

High-end hotels prove the point with striking clarity. Properties across Europe charge between €1,000 and €2,000 per night. Occupancy holds firm. No drop in demand appears. In Toronto the Four Seasons commands about $1,400 nightly. These rates reflect more than inflation. They show travelers prioritize experiences over savings.

Yet challenges exist. Oil trades above its 50-day moving average. Tensions in the Middle East reroute flights and unsettle some markets. A new report from Tourism Economics and Oxford Economics notes that recovery from tourism crises now takes 10 to 12 months on average. That marks a sharp improvement from the 24 months common in the early 2000s. Travelers substitute destinations. They shorten booking windows. They hunt for value. Global demand outside affected regions still grows.

International arrivals hit 1.52 billion in 2025. That figure sits 4 percent above the prior year despite wars, climate events and economic pressure. Routesonline detailed the findings in early September. The data underscores a key shift. Tourism no longer resets after shocks. It reroutes. Faster adaptation becomes the competitive edge.

Europe demonstrates that resilience. The region posted 4 percent growth in arrivals this year. Africa matched the pace. Egypt recorded a 16 percent jump even amid regional instability. Prensa Latina reported those figures on September 11, highlighting how travelers seek perceived safe havens. Prensa Latina framed 2026 as a test of systemic endurance for the industry.

CoStar and Tourism Economics raised their U.S. hotel outlook significantly after strong first-half results. They now project 4.4 percent RevPAR growth for 2026, up from an earlier 2.8 percent forecast. Occupancy should reach 63.1 percent. Average daily rates climb 3.1 percent. The update, covered by Hotel Dive on September 10, credits leisure travel, recovering business demand, the World Cup and upcoming America 250 celebrations.

Cruise lines add another layer of strength. Passenger counts keep rising. CLIA data shows 37.2 million cruisers in 2025, up from 34.6 million the year before. Projections point to continued gains. Holmes has repeatedly called modern ships floating hotels that satisfy pent-up demand for experiences. Recent coverage from Proactive and Forbes reinforces his long-held optimism on the segment.

Disruption still exacts a toll. A Perk UK survey found 90 percent of UK business travelers faced issues in 2025. Cancellations, delays and visa problems climbed. Weather events affected 39 percent of corporate trips, nearly double the prior year. The report, published last year but still relevant, estimates £1.6 billion in annual costs to UK firms from travel chaos. Perk highlighted how flexibility options gain traction as companies respond.

Broader outlooks mix caution with opportunity. Deloitte’s 2026 Travel Industry Outlook warns that momentum could moderate as high-spending groups turn cautious. Generational changes matter too. Millennials and Gen Z now dominate U.S. demand. They favor experiences, personalization and value. AI tools for trip planning gain ground quickly. The full analysis appears in Deloitte Insights.

Oxford Economics expects global travel to accelerate in 2026 despite softer GDP growth. Asia-Pacific benefits from China’s stimulus. The Middle East could rebound if tensions ease. Value consciousness rises. Younger travelers lean on AI for planning. Those themes run through the firm’s December 2025 briefing, updated with fresh data this year.

Holmes manages exchange-traded funds focused on the sector. The JETS ETF and TRIP ETF reflect his conviction. He has highlighted strong pricing power, record passenger volumes and the psychological shift toward experiences post-pandemic. In earlier Proactive interviews he noted airlines placing reward-point upgrade seekers on waitlists because demand overwhelms capacity.

That pressure shows no sign of easing. Business travel rebounds. Leisure remains non-negotiable for many households. Older travelers, especially those over 65, increase spending fastest in some markets. Barclays research from earlier this year found UK travel spend rose 2.4 percent in 2025 while holidays stayed protected from cutbacks. Barclays described 2026 as a year of rewritten assumptions and active risk management.

Airports benefit too. Non-aeronautical revenue from retail, parking and real estate climbs as passenger numbers set records. Holmes has written on the topic for Forbes, arguing that publicly traded airports outside the U.S. capture this growth while American infrastructure lags.

Of course risks remain. Sustained Middle East conflict could trim global travel growth by 3 percent and weigh on 2027, according to Tourism Economics scenarios. Consumer caution could spread if inflation reignites or wealth effects fade. Hotel operators and airlines must balance capacity discipline with the risk of overbuilding.

Yet the data keeps pointing upward. Record cruise passengers. Rising RevPAR forecasts. Strong European and African arrivals. Persistent pricing power at luxury properties. Holmes distills it simply. Demand stays exceptionally strong. It creates favorable conditions for airlines, hotels and the broader hospitality sector.

Investors who dismissed travel stocks during earlier volatility may now face higher entry points. The fundamentals, however, appear intact. Travelers vote with their wallets and their calendars. They choose movement over stasis. They accept trade-offs for the sake of new sights, meetings and memories.

The industry adapts faster than before. Recovery periods shorten. Substitution patterns emerge quickly. Technology helps reroute, rebook and reassure. That operational agility, paired with genuine consumer desire, supports Holmes’ outlook. Travel doesn’t just endure uncertainty. It finds new paths through it.

Watch the latest interview for the full exchange. Holmes speaks with the confidence of someone who has tracked these cycles for years. His funds remain positioned for continued strength. The numbers, the rates, the passenger counts all back him up. For now the sky looks clear enough for takeoff. Even if a few storms appear on the horizon.