financetom
Economy
financetom
/
Economy
/
Travel companies rein in their forecasts as US consumers cut spending
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
Travel companies rein in their forecasts as US consumers cut spending
Aug 8, 2024 3:20 AM

NEW YORK (Reuters) - Travel companies including Airbnb and Marriott International ( MAR ) are forecasting a slowdown in leisure travel as U.S. consumers wait longer to book vacations in a time when the economic outlook remains uncertain. 

After several years in which robust demand padded the industry's bottom line while regions in other parts of the world were still recovering from the pandemic, travel companies have warned investors that U.S. bookings in the third quarter will be flat.

"They have less available, less disposable income and (less) capacity to do anything including travel," Hilton Worldwide ( HLT ) CEO Christopher Nassetta told analysts on an earnings call on Wednesday. 

The company said it expects growth in all travel segments but cautioned that growth in leisure travel will be "very, very low." 

Hilton Worldwide ( HLT ) raised its profit forecast for 2024 as international revenue offset losses from slowing U.S. demand.

Other companies are feeling the effects as well, from Delta Air Lines and United Airlines to Walt Disney, which flagged weakness in its parks division in its quarterly results on Wednesday. 

Hilton peer Marriott ( MAR ) lowered its forecast for growth in room revenue in 2024, in part due to softer demand in North America. Leisure room revenue in the region grew just 1% in its most recent quarter.

Vacation rental company Airbnb ( ABNB ) and online travel agency Booking Holdings ( BKNG ) both said they are seeing slowing growth in the United States. Some consumers are trading down for lower-priced options while others are booking trips at the last minute, which is another signal of weakening demand. 

"We're not seeing as many people book all of their vacations at the beginning of the calendar year any longer," said Julie Brinkman, chief executive of short-term rental management platform Beyond. "They're now waiting until they get closer to the travel date, and can confirm that they have the funds to actually take a trip." 

Airbnb ( ABNB ) shares closed 13.4% lower on Wednesday at $113, their lowest close since May 26, 2023. Shares of Booking Holdings ( BKNG ) closed 3.3% lower on Wednesday. The company said room night bookings in the second quarter grew more slowly in the United States than in the rest of the world.

"As we look ahead to the third quarter, we believe room night growth will be impacted by a booking window that expands less than it did in the second quarter," said Glenn Fogel, Booking Holdings' ( BKNG ) CEO. 

Investors will get another look at trends in leisure travel on Thursday when online travel agency Expedia Group ( EXPE ) reports second-quarter earnings after the bell. 

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
Analysis-Steady Fed outlook boosts stock market's hopes for coveted 'soft landing'
Analysis-Steady Fed outlook boosts stock market's hopes for coveted 'soft landing'
Mar 20, 2024
NEW YORK (Reuters) - A U.S. stock market perched at record highs received an encouraging message from the Federal Reserve, after the central bank stuck with its rate cut projections for 2024 despite stronger-than-expected economic growth. For weeks, evidence of robust growth and stubborn inflation had whittled away at the market's expectations for how deeply the U.S. central bank will...
Morning Bid: Markets feed off unfased Fed and SNB jumps gun
Morning Bid: Markets feed off unfased Fed and SNB jumps gun
Mar 21, 2024
A look at the day ahead in U.S. and global markets from Mike Dolan With markets already cheering the Federal Reserve's restated consensus on three interest rate cuts later this year, the Swiss National Bank added spice on Thursday with a surprise rate cut that sets central bank easing speculation alight again. With bets on the first rate cuts from...
How the Federal Reserve impacts personal loans
How the Federal Reserve impacts personal loans
Mar 20, 2024
March Fed meeting On March 20, 2024, the FOMC decided to hold steady on interest rates. The benchmark rate remains at 5.25-5.5 percent. Most personal loans have fixed rates, so current borrowers do not need to worry about their interest rates changing. Borrowers in the market for a personal loan should prepare for rising interest rates, but there are things...
Analysis-Steady Fed outlook boosts stock market's hopes for coveted 'soft landing'
Analysis-Steady Fed outlook boosts stock market's hopes for coveted 'soft landing'
Mar 20, 2024
NEW YORK (Reuters) - A U.S. stock market perched at record highs received an encouraging message from the Federal Reserve, after the central bank stuck with its rate cut projections for 2024 despite stronger-than-expected economic growth. For weeks, evidence of robust growth and stubborn inflation had whittled away at the market's expectations for how deeply the U.S. central bank will...
Copyright 2023-2026 - www.financetom.com All Rights Reserved