Economic uncertainty clouds analysts' travel outlook

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

Naved Khan, senior analyst at Truist Securities, says “the question we as analysts keep getting asked is, ‘What do you think growth looks like in ‘23, with everything that’s going on at the macro level?’”

Due to economic conditions, consumers could scale back their travel, for example, from five-star to four-star hotels and from five or seven nights to three or four, says Khan during The Phocuswright Conference’s Executive Panel: Street Talk.

Mark Mahaney, senior managing director at Evercore, says as the economy slows, “the only part of consumer discretionary spend that’s holding up is travel, and I hope it continues to hold up.”

But workforce reductions in 2023 could lead to jobless people canceling their vacations, Mahaney adds.

Lloyd Walmsley, managing director at UBS, say the investment community is concerned about what will happen, particularly in Europe, in 2023.

Booking.com is well-positioned for a downturn, but because so much of Booking’s business comes from Europe, it could be hurt if that continent suffers an economic hit, according to Walmsley.

“We’re in this phase where we’re moving from … recovery stories to questions around, ‘What does normalized growth look like?’” he continues.

“Compounding that is, ‘What happens to travel in a recession?’”

Watch the entire conversation moderated by Charuta Fadnis, senior vice president of research and product strategy at Phocuswright, in the video below.