by Donald Wood
Last updated: 1:50 PM ET, Fri February 23, 2024
Online travel agency Booking Holdings revealed lower
expectations for the first quarter and full year of 2024 as travel
demand in the United States begins to normalize following a post-pandemic surge.
During a quarterly financial call, officials from Booking
Holdings announced that gross travel bookings grew 24 percent in 2023, but
losses could top roughly $11 billion in market value if 2024 projections are
accurate, according to Reuters.com.
Room nights booked during the final quarter of 2023 grew 9.2
percent, while gross travel bookings were $31.7 billion, compared with a
projection of $31.3 billion. In addition, the company’s revenue rose 18 percent
to $4.78 billion in the fourth quarter, topping the $4.73 billion analysts had
projected.
Along with other companies like Hilton and Marriott, demand
is expected to grow more slowly this year, disappointing investors. As a
result, Booking Holdings shares fell eight percent on Friday morning.
“After two plus years of strong stock performance, the room
nights booked deceleration could drive a bit of a pause in the shares,” RBC
Capital Markets analyst Brad Erickson said.
Booking Holdings Chief Financial Officer David Goulden said
the lowered expectations for 2024 have been impacted by the ongoing conflict
around Israel, as well as exchange rate changes.
Despite the negative response to the 2024 outlook, Chief
Executive Officer Glenn Fogel still believes in a strong upcoming summer
season.
“As we look to the year ahead, we see strong growth on the
books for travel that’s scheduled to take place in 2024, which gives early
indications of potentially another record summer travel season,” Fogel said.
The travel advisor community is feeling the pressure as
well.
“Post-pandemic travel demand is gradually normalizing,” Stepping Out Travel Services CEO Mandee
Migliaccio said. “Although clients are eager to embark on vacations and are
actively seeking quotes, the escalating expenses linked with air travel are
giving them pause, prompting a reassessment of their plans or a search for
alternative destinations.”
“Nevertheless, amidst this financial caution, a heartening
trend is unfolding: multi-generational travel is on the rise,” Migliaccio continued.
“Grandparents, in particular, are choosing to invest in shared experiences,
prioritizing the creation of lasting memories over the traditional focus on
passing down inheritances.”
While ongoing wars in the Middle East and Ukraine, along
with inflation, have resulted in less disposable income, agents are finding
that people still want to see the world.
“I do not think that post-pandemic travel demand is
normalizing just yet,” Travel Hub 365
CEO Stephen Scott said. “We are entering another major booking period for
Spring Break travel and we see strong activity compared to last year.”
“What could cause problems though are airline safety issues,
and airline increases in baggage fees that all contribute to consumers taking a
step back from budgeting for travel,” Scott continued.
Some advisors are even reporting continued record growth.
“We have not seen any slowdown and we continue to produce
record-breaking numbers and we have seen a huge increase in the amount of money
people are spending on their trips,” Dreamers
Travel’s Mark Hennigan said. “The average client booking $3000-$4000 trips
are now spending $5000-$7000 trips.”
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