What’s going on here?
Travel giants like Airbnb, Marriott, and Hilton are seeing a slowdown in US bookings as vacation plans stall amid economic uncertainty and tighter budgets.
What does this mean?
With the US economic outlook remaining shaky, consumers are delaying travel plans and opting for last-minute, budget-friendly vacations. Hilton’s CEO highlighted that lower-income earners are the most affected, causing the company to predict minimal growth in leisure travel while relying on strong international revenue to raise its profit forecast for 2024. Meanwhile, Marriott has adjusted its room revenue growth projection downward, reporting only a 1% increase in leisure room revenue last quarter. Airbnb has also felt the pinch, with its shares dropping 13.4%, the lowest since May 2023. Booking Holdings echoed these concerns, noting slower growth in US room bookings and a shorter booking window, likely impacting future quarters.
Why should I care?
For markets: Travel stocks feel the pinch.
Investors are closely monitoring leisure travel trends as reduced demand impacts giants like Delta Air Lines, United Airlines, and Walt Disney’s parks division. Upcoming earnings reports from Expedia Group are anticipated to shed more light on the sector’s trajectory.
The bigger picture: Economic caution curtails wanderlust.
Consumers’ shift towards budget-friendly, last-minute bookings reflects broader financial caution. People are now booking vacations closer to travel dates, ensuring they have the funds available, according to a short-term rental management platform CEO. This trend could signal a prolonged period of subdued growth for the travel industry unless economic conditions improve.
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