Fears of recession and the impact of inflation on consumer budgets could slow the rebound in demand for trips recorded by US travel companies in the fourth quarter, although bookings are holding up year-to-date, analysts say.
Several big names in the travel and leisure industry, including Airbnb Inc, Hilton Worldwide Holdings, and Royal Caribbean Cruises are reporting faster booking rates in 2023 than they were in 2019, before the coronavirus pandemic.
Travel spending in the United States in December 2022 amounted to $97 billion, 3% above 2019 levels and 7% higher than in 2021, according to the United States Travel Association.
The demand contrasts with declining home improvement sales and other discretionary purchases that have hurt furniture stores and retailers like Home Depot.
“Investors are increasingly convinced that we will not see a decline in travel in the first half of the year, but the second half of the year remains to be seen”said Patrick Scholes, managing director of Truist Securities.
International travel fueled demand growth for Airbnb and Marriott International Inc in the fourth quarter. Demand for short-term rentals in December increased 33% compared to 2019, according to data from analytics firm AirDNA.
American Express said bookings through its consumer travel business were 50% higher in the fourth quarter compared to pre-pandemic levels, the strongest rate the credit card company has seen since the start of the recovery.
Online travel company Booking Holdings Inc Chief Executive Officer Glenn Fogel said Thursday that January 2023 set a new record for monthly room night bookings.
Source: Reuters
Source: Gestion
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