Flights, Hotels and Parks Are All Flashing Travel Warning Signs

[Airband]

Flights, Hotels and Parks Are All Flashing Travel Warning Signs

Facing an uncertain outlook, consumers are getting choosier -‘We’re shifting back to normal.’

Travelers wait in line at a security checkpoint at Denver International Airport

Fri Aug 9, 2024 - Bloomberg News
By Natalie Lung, Augusta Saraiva, and Anthony Palazzo

The great post-pandemic boom in consumer travel is officially over.

With the US economy showing signs of slowing and the financial cushions many accumulated during the Covid-19 pandemic wearing thin, travelers are reining in their post-lockdown wanderlust and tightening their belts.

The pulse of travel matters as policy makers and markets look for answers to a big question: How long will consumers be able to keep spending? While household demand remains healthy, wages aren’t rising as fast anymore and more consumers are struggling to pay off their high-interest credit-card balances.

“I think the post-pandemic travel behaviors are over, where people were taking longer trips,” said Nicholas Jones, analyst at Citizens JMP Securities LLC. “The pent-up demand for travel has abated. We’re shifting back to normal prepandemic travel patterns.”

Evidence of a slowdown is everywhere: Online lodging platform Airbnb Inc. plunged by a record after warning that growth in bookings is decelerating, even in the middle of the peak summer season. European discount carrier Ryanair Holdings Plc went from expecting a modest rise in air fares to warning they’ll be “materially lower” because of thrifty consumers. And travel platform Expedia Group Inc. said Thursday that it’s revising down its annual outlook for a second time this year.

According to travel advisory Embark Beyond, which serves primarily US-based ultra-high net worth individuals, the average trip length is down 14% year-over-year, now averaging 6.2 days rather than 7.8. Even among its deep-pocketed travelers, the word of the year is “value,” said Embark co-founder Jack Ezon.

Carriers from United Airlines and Delta Air Lines to deep discounters Spirit Airlines and Frontier Group have also set less ambitious financial goals and are slowing plans to expand. Low-cost US players that added too many seats have been forced to slash prices, pushing bigger rivals to follow suit or risk losing passengers. And air carriers in Europe are being challenged by an oversupply of flights competing for business on lucrative transatlantic routes.

On the ground, hotel prices, which had been soaring unchecked for years, are leveling off, while traditional tourist attractions like theme parks are struggling. Walt Disney Co. and Comcast Corp. both rattled investors with recent warnings of slower business at their parks.

“Travel has been the pocket where things have been most resilient,” said Michael Erstad, leisure travel analyst at equity research firm M Science. “This is the first time we are starting to hear some rumblings of that robustness not being there.”

Demand for travel isn’t collapsing. Many companies are reporting stronger revenue than before the pandemic. Travelers are still willing to seize opportunities for a trip to Japan, a Caribbean cruise or a weekend in Las Vegas — freedom that can still feel novel, even years removed from the isolation protocols of the pandemic.

Still, travelers are becoming more price conscious, and are increasingly willing to hold out for a better deal. And when more attractive rates don’t materialize, they are often opting for getaways that fit better within their budgets.

Taylor Garland, an Airbnb host in New Mexico, said consumers are still eager to get away, but are also looking for savings. The smaller of her two properties has been popular this summer, and people have reached out directly to negotiate rent and avoid charges that can add to the cost of booking on the app.

“When we feel uncertain about the future, allocating money toward vacations isn’t a priority,” Garland said.

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[deicer]

I think this is the most pertinent passage.  We are just getting back to 'normal'...

“I think the post-pandemic travel behaviors are over, where people were taking longer trips,” said Nicholas Jones, analyst at Citizens JMP Securities LLC. “The pent-up demand for travel has abated. We’re shifting back to normal prepandemic travel patterns.”