Your suitcases may be gathering dust for the next few months.
With consumers becoming more cautious and travel costs rising, some of the country’s largest travel companies are predicting a quieter summer.
Expedia (EXPE) Group’s new CEO, Ariane Gorin, told me on Yahoo Finance’s Market Domination that the company has seen a “slowdown” in demand that could extend well into the current quarter. Demand is expected to improve before the holiday season, or Expedia’s fourth quarter.
Gorin officially took over from CEO Peter Kern on May 13. Kern will continue to serve on Expedia’s board of directors as vice chairman.
The decline in demand is relatively small and does not indicate an impending recession. However, the change in tone among top executives is noticeable.
Airbnb (ABNB) warned that investors should expect a moderation in year-over-year growth in its nights and experiences category for the quarter. The company also warned that it is “seeing shorter booking lead times globally and some signs of softer demand from U.S. guests.”
The cuts are being seen in both Europe and North America, Airbnb CFO Ellie Mertz told analysts during the company’s earnings presentation.
Disney is cautious about demand for theme parks in the coming quarters as consumers become more discerning in their spending patterns.
“We’re certainly seeing consumers behaving in ways that I wouldn’t necessarily call recessive — they’re being a little more careful about their money,” Disney CFO Hugh Johnston told me in Yahoo Finance’s Morning Brief.
As for Gorin, she’s doubling down on marketing for brands like Hotels.com and Vrbo, while also seeking new growth opportunities abroad. This comes after Kern spent years cutting costs, refocusing the business, overhauling its tech stack and launching the OneKey rewards program.
Expedia seems to be moving in the right direction.
Second-quarter revenue and adjusted net income rose 6% and 10% year-over-year, respectively. Room nights booked increased 10%. Overall performance at Vrbo — which has been struggling — improved sequentially.
The company has bought back $1.2 billion of its own shares so far this year.
“Expedia reported solid second-quarter results, driven by the strength of the Expedia brand and improvement in Vrbo. Despite some macroeconomic weakness in July, the lower full-year guidance was better than feared,” JPMorgan analyst Doug Anmuth wrote in a note to clients.
Anmuth gave Expedia shares a neutral rating.
Expedia shares have risen 13% since Gorin became CEO, outperforming the S&P 500’s gain of 1.8%.
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