Well-known global consumer brands worldwide are increasingly signaling choppier days ahead. Big tech is implementing hiring freezes, some like Stripe are shedding staff (allegedly 14%), and many well-known publicly traded Amazon, Alphabet, Apple, Facebook, Microsoft, and others are guiding lower and taking a hammering on the stock market. In short, I’m reading the (non-travel company) guidance is more pessimistic, pointing to slower growth ahead for these companies. I am conscious that a company’s stock price is not directly indicative of its performance, but it’s another arrow in the pessimism quiver.
Our beloved travel companies are one sector bucking the trends (cue long overdue applause and cheering).
This bucking of the trend is (a) not being fully appreciated or recognized, (b) it’s essential to focus on the positive in addition to the negative, and (c) for travel companies to make hay while the sun is still shining.
Booking.com had a fantastic earnings quarter and is raising guidance for Q4. Expedia came out with banner numbers, and Airbnb did better than at any other time in its history. Airlines are equally bullish, and strong tailwinds are going into the busy year-end holiday season. Delta forecasts growing profits, as does American Airlines, among other large carriers. I treat MidEast carriers as privately held companies (for purposes of finding out exact revenue numbers compared to their publicly traded counterparts). Still, one can look at destination cities’ growth as a positive growth signal. A shrinking airline does not INCREASE routes. I see Qatar Airways, Emirates, and FlyDubai all starting or restarting service to cities. Marriott and Hyatt are topping estimates, and I suspect other large brands will too, which is a broad positive signal for the market. I could go on and on (it’s an excellent problem to have) listing travel companies having better than expected results for Q3.
1 ‘I Was Right’ Point For Me
My earlier prediction (from Feb 2022) of a rough summer rang true, and thankfully, behind us as I look forward to a better Q4 (with the jury being out for Q1 onwards).
A Strong Q4 Ahead
My July 2022 projection of a macro-2023 being worse than 2022 still (unfortunately) remains unchanged. I posit a strong broad-based Q4 holiday season with positive news all around, given that the rising tide lifts all boats situation (I limit my thoughts to Q4 2022). It will be a strong holiday season for travel companies across essential travel products (airline, hotel, cruise…). Good momentum is always lovely to report as a bright spot amidst increasing pessimism.
2023 is still tracking to be a worse year.
My readings led me to conclude this growth spike will peak in Q4 and will start to take a hit in the typically slow Q1 (until pre-summer Q2 2023). After which macroeconomic reality will catch up with the travel industry due to the cooling of the global economy (rising interest rates, talks of stagflation, the need to contract the economy to reduce inflation). It’s too early to posit on Summer 2022 (end Q2 and Q3 2023), but that’s what I’m tracking now.
(Since I’m new to the blogosphere, a reminder I typically posit ~3 months in advance rather than predict what’s going to happen a year from now. Said another way, when given the choice of the two, I’m a pragmatist, not a futurist. )