Travel and leisure companies are reporting strong sales gains and interest from tourists
The Delta version is returning to the streets and sky in the US post-holiday, setting expectations for a busy holiday season, after an earlier fall.
After nearly two years of disruption due to the COVID-19 pandemic, travel and leisure companies are reporting strong sales gains and interest from tourists. Bookings are increasing. Rooms are filling up. Shows are being added.
Uncertainties still remain. Business travel is returning more slowly, recovery has been choppy in some parts of the world and a further surge in Covid-19 cases threatens. But officials say the disruption from the late summer Delta version has mostly passed.
Airbnb Inc. “Travel is making a comeback even as the pandemic continues,” Chief Executive Officer Brian Chesky said on Thursday. Airbnb shares rose 13% on Friday following the home-sharing company’s earnings update.
The delta wave of the COVID-19 pandemic appears to be at its peak, with a decline in new cases, hospitalizations and deaths in most US states. Public-health experts say factors likely to decline include an increase in vaccines and a return to precautions such as wearing masks in some areas.
Investors recently picked up on the optimism expressed by travel and leisure companies and the prospects of a reopening economy. Shares of several airliners, cruise operators, casino operators and travel companies rose more than 5%. Overall, the Dow Jones US Travel & Leisure Index jumped 4.6% on Friday and is up 17% so far this year.
The US is set to lift border restrictions on Monday, boosting demand for travel. “When the US announced that international visitors could arrive from November 8, if they were vaccinated, our bookings went up immediately,” Glenn Fogel, chief executive of online travel agency Booking Holdings Inc., said in an interview this week. Booking shares rose 7.5 per cent on Friday.
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Hyatt Hotels Corp., which posted a profit for the third quarter, expects revenue from reduced leisure at its Americas resorts for the last weeks of December to be 25% ahead of 2019 levels, CEO Mark Hopelamazian said. “At this pace, we anticipate that the festive season could be one of the strongest we have ever experienced,” said Mr. Hopelamazian. Hyatt shares rose 3% on Friday.
A survey by Deloitte LLP in September of nearly 6,500 people found that four in 10 Americans plan to travel between Thanksgiving and early January.
Some leisure companies said they see good demand in 2022. Live Nation Entertainment Inc. said it has more shows booked for next year in 2019 than in 2020. Cruise operators Royal Caribbean Group and Norwegian Cruise Line Holdings Ltd., both of which faced more than a year-long hiatus in the US before resuming sailing, said they expect to be profitable at some point in 2022.
“As cases go down, demand is back,” Jason Liberty, head of finance at Royal Caribbean Group, said last week.
Candy Delgado, 64, said she and her husband went on a Disney cruise in the Caribbean this week. Ms Delgado said she felt comfortable going on a cruise despite the COVID-19 risks, as she had been vaccinated and the ship was operating at low occupancy.
“We are very good at practicing social distancing and safe procedures,” said Ms Delgado.
However, travel recovery remains uneven around the world. Booking Holdings, which operates websites such as Priceline and Kayak, saw some improvement in the level of stay bookings from international travel, but international room nights remain below 2019 levels, Mr. Fogel said.
Travel-search platform Trivago NV said it does not expect a full rebound in travel in winter due to uncertainty about the COVID-19 pandemic, and travel restrictions in Asia and Australia hurting traffic volumes in its segment which covers the rest. World.
But Trivago said it expects travel demand and behavior to reach pre-pandemic levels in the US and Europe with a strong rebound in city and international travel in spring and early summer 2022. Shares of Trivago were up more than 15% on Friday.
In China, the recovery for hotel chain Marriott International Inc. has been choppier due to the country’s COVID-zero policy, said CEO Anthony Capuano. China is following its playbook of neighborhood lockdowns, location tracking, week-long quarantines and indefinitely delayed visas, in an effort to eradicate every single case of the virus.
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|lyv||Live Nation Entertainment, Inc.||123.80||+16.28||+15.14%|
|RCL||Royal Caribbean Group||96.67||+7.94||+8.95%|
|district||Walt Disney Company||175.63||+5.35||+3.14%|
|bkng||Booking Holdings, Inc.||2,618.97||+181.96||+7.47%|
|March||Marriott International, Inc.||167.61||+3.52||+2.15%|
“Demand declined significantly in August after the government tightened lockdowns in response to the small regional COVID outbreak,” Mr Capuano said. “As soon as those restrictions were lifted, demand picked up again in September.” Marriott shares gained 2.1% on Friday.
The companies said leisure travel has been the main force of recovery as the Delta version weighs in on business travel and the companies’ office-to-office plans. Marriott said continued demand for leisure travel fueled profits in the most recent quarter, while the proliferation of Delta Edition hurt parts of its business involving corporate travelers.
Business travel is showing signs of a comeback in some companies. Lyft Inc. The number of rides to the airport nearly tripled in the third quarter of the previous year. Finance chief Brian Roberts said some of those airport rides could signal the start of corporate travel.
“We are starting to see an increase in business travel, but it is early,” Mr Roberts said. “And we expect this to become more apparent as more companies return to the office.”
Amidst increasing demand, travel companies are considering adding staff. Recruitment in the leisure and hospitality industries, which includes restaurants, took US jobs in October.
Hyatt is still working to fill thousands of open positions across the country, Mr. Hopelamajian said. And like other businesses, hotels are absorbing the effects of inflation. Unsurprisingly, Hyatt has seen wage rates increase by 10% to 20% depending on the location and category of labor, its CEO said.
“The labor market remains really tight,” said Mr. Hoplamazian.