Economic uncertainty clouds analysts’ outlook for travel

What is the outlook for the travel industry from Wall Street analysts?

Naved Khan, senior analyst at Trust Securities, says, “The question we as analysts keep getting asked is, ‘What do you think growth will look like in 23, with everything happening at the macro level?’

Due to economic conditions, consumers may reduce their travel, for example, from five-star to four-star hotels and from five or seven nights to three or four, Khan says during the Executive Panel: Street Talk at The BogusRite conference.

Mark Mahaney, Evercore’s senior managing director, said that with the economy slowing, “travel is the only area where consumers are spending more discretionary, and I expect that to continue.”

But labor cuts in 2023 could lead to jobless people canceling their vacations, Mahaney adds.

Lloyd Walmsley, managing director of UBS, said the investment community was concerned about what would happen in 2023, particularly in Europe.

Booking.com is well-positioned for a downturn, but because much of Booking.com’s business comes from Europe, according to Walmsley, it could suffer if that continent suffers economically.

“We’re at this point… from recovery stories to, ‘What does normal development look like?’

“I mean, ‘What happens if you travel in recession?'”

In the video below, watch the entire conversation conducted by Saruta Fadnis, Senior Vice President of Research and Product Strategy at FocusRite.