Good News & Bad News 📈

We are Saniya and Athira, research analysts, back with the August numbers on the Skift Travel Health Index (STHI). And also — cue drumroll — with a new data partner.

We are excited to welcome PriceLabs to the STHI.

PriceLabs is a Chicago-based revenue management and dynamic pricing platform serving independent hotels and vacation rentals in more than 150 countries. Its data gives us a much more nuanced look at hotel pricing by destination.

That brings the STHI to 21 data partners, 76 indicators and 22 major economies.

One quick note: PriceLabs also gave us historical data, so we have recalculated the hotel index for earlier months to keep the series consistent. The revised figures are the ones to use going forward.

And a refresher for anyone just starting to follow the index: The STHI is Skift Research’s proprietary index that tracks performance across 22 major economies, now using 76 data points from 21 data partners across aviation, hotels, vacation rentals, and in-destination activities.

We benchmark each month against the same month in the previous year.

The index landed at exactly 100 in August, flat year-on-year. 

But there was plenty going on. Travelers are still traveling, but they are choosing where to go based on price, access and perceived risk. The Middle East and Africa bounced back. Vacation rentals continued to lead the sectors. Europe’s short-term rental sector refused to end its summer. And the U.S. is still having a hard time getting international visitors through the door.

So, yes, the index is flat. The travel market is not. Here are the trends that defined August 2026.

European travel had a tougher summer, with heat waves weighing down on overall performance. Vacation rentals, however, kept the momentum and grew 3% year-on-year. And the demand did not stop when August did.

Six of the seven markets tracked by PriceLabs saw faster booked-night growth in September than in August. Travelers are continuing to book into the shoulder season.

Short-Term Rental Booked Nights: Year-on-Year Growth (% Change)

There is a catch, though. The European Commission's proposed Affordable Housing Act would give local authorities greater scope to restrict short-term rentals in areas facing housing pressures. So demand is there. But operators will need to maintain enough supply to capture demand as Europe's regulatory environment evolves.

Travel is getting more expensive. Global air traffic fell 2% in June before growing a little (0.2%) in July. Meanwhile, jet fuel prices were still 52% above last year. That pressure is showing up in fares. Nium data on average flight transaction values from January through August highlights this increase across the board.

Cost is the main reason why people are choosing to stay home. But those who are traveling are willing to spend more.

Hotels are seeing something similar. CoStar and Tourism Economics raised their 2026 U.S. RevPAR forecast to +4.4%, up from +2.8%, even though occupancy growth is expected to remain flat. 

But higher revenue does not necessarily mean higher profits.

STR expects GOPPAR to grow 4% this year, but hotel expenses are continuing to rise. Once inflation is taken into account, profitability is still below pre-pandemic levels. 

The Middle East took a serious hit earlier this year as the U.S.–Iran conflict affected air travel and security perceptions across the Gulf. But the region is showing signs of recovery, with the index up to 105 in August, showing overall growth of 5% year-on-year.

Data Appeal found that each country took the shock differently:

But as conditions stabilized, perceptions started recovering. Travelers have not stopped caring about geopolitical risk, but are not reacting to it immediately.

There are still reasons to be cautious. The FIA cancelled the Bahrain and Saudi Arabia F1 races because of the conflict. 

But there are also reasons for optimism. Qatar and Abu Dhabi are still scheduled to host the final two Formula 1 races of the 2026 season, while the 2027 calendar includes four Middle East rounds. The WTTC values travel and tourism across Saudi Arabia, the UAE, Oman and Qatar at $272 billion in 2025, projected to reach $435 billion by 2036, and expected to be the world's fastest-growing travel and tourism region through 2036.

And finally, there is North America, scoring 101 on the index, which is fairly healthy. The U.S. international travel picture, however, is less encouraging. International arrivals to the country fell 12% year-on-year in August, the fifth consecutive monthly decline.

Canadian return trips from the U.S. were up 9%, but that increase was due to a low base arising from the declines last year. Traveler sentiment remains weak: 56% of Canadian travelers surveyed said U.S. policies, trade practices and political statements made them less likely to visit.

Then there was the 2026 FIFA World Cup. The tournament brought 104 matches to the U.S. and generated an estimated $3.9 billion in hotel room revenue, which is significant, but low compared to equivalent Super Bowl weeks.

This highlights how a mega-event may not necessarily create sustained demand after it is over.

There is also the policy side. A permanent visa bond program now requires travelers from around 50 countries to deposit up to $20,000 for a B1/B2 visa.

At the same time, U.S. travel industry leaders are targeting more than 100 million international visitors a year by 2030.

August was a flat month on paper, but a pretty busy one underneath. Travelers are still traveling, but they are making more calculations along the way. Price matters. Timing matters. Access matters. And geopolitical risk can change the picture pretty quickly.

See you next month.

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