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Steven I. Green
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Expedia, Airbnb, and Booking Holdings Could See a Travel Slump
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The online travel agencies expect strong summers, but will that be the case?
Dreamstime
There could be trouble brewing for the online-travel-agency stocks, with early signs that macroeconomic factors could blunt a nascent recovery in U.S. leisure travel.
In reporting March quarter results,
Expedia
Group (ticker: EXPE),
Booking Holdings
(BKNG), and
Airbnb
(ABNB) all said that they expect a strong summer travel season. But gasoline prices have spiked almost 20% since the three companies reported results in the first week in May, government data show, interest rates remain high and recession fears are growing. In short, there are signs that the postpandemic travel boom could be in trouble.
BTIG analyst Jake Fuller reports in a research note Friday that he’s seeing worrisome data points on the outlook for the online travel sector. In particular, he notes that traffic to Expedia, Booking, and Airbnb websites have slowed considerably in June from May.
“We view the change in trend as a potential early warning sign that travel isn’t immune from the mounting macro pressure,” he writes.
Fuller has been tracking site traffic relative to the same months in 2019, before the pandemic. He notes that in recent months, the trends have improved. For Airbnb, for instance, he notes that traffic was slightly below 2019 levels in March and April, but 6% above 2019 in May. So far in June, though, traffic is 2% below the prepandemic level. For Expedia, traffic was 8% below the 2019 level in May—and 17% below that mark so far in June. For Booking, a 5% increase over the 2019 level in May has given way to a 4% decline for the month to date.
Fuller writes he’s not that worried about June quarter financial results, but he sees potential that cautious commentary when they report earnings could weigh on the stocks.
“This should be a strong summer travel season” for the online-travel-agency companies, he writes, but adds that “macro pressure could weigh on bookings for stays in future periods.”
Amid a broad rally in technology shares, Expedia, Booking, and Airbnb stock are all trading higher on Friday. Fuller maintains his Buy rating on Expedia and Neutral ratings on Booking and Airbnb.
Write to Eric J. Savitz at [email protected]
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