Travel & Leisure Q4 Earnings Quotes
Interesting quotes and anecdotes from Q4 2023 travel and leisure company earnings calls. Consumer demand is still healthy but we've definitely normalized.
We’ve seen a decent rally in global travel and leisure since my previous update in November where EV/EBITDA multiples were down to 8.0x. As of today we’re at 9.3x EV/EBITDA which is back above the median excluding covid of 8.9x on the back of an overall market rally and a stronger than anticipated consumer environment.
Quick takeaways for each segment of travel & leisure from earnings calls:
Airlines: Domestic demand remains strong, International seeing overcapacity, demand trends are normalizing. Peak demand periods are extremely strong but off-peak a little weak.
OTAs: Consumer demand remains resilient and no sign of consumer trade down but we’re past post-covid normalization
Hotels: Corporate demand is still slowly recovering but SMB and leisure is still extremely robust.
Cruise: No slowdown in consumer demand and health remains strong so they can push pricing
Car Rental: Corporate demand is picking up and leisure demand remains strong especially for peak periods.
Macro Quotes from Credit Card Companies:
Visa: “And as you click into those, e-comm growth in the low teens and 19% growth on travel with the index going from 139 to 142…The Q1 results were strong, 16% growth, healthy growth for both travel and e-comm and we feel good about the outlook for the rest of the year.”
American Express: “In terms of airline spend, and if you heard, I'm sure the various airline, they all made comments about the bid of a softer demand. And since many of those customers are using an American Express card to pay for the airline ticket, we saw a similar trend.”
Mastercard: “Looking at cross-border for both Q4 and the first four weeks of January, cross-border travel growth continues to be primarily impacted by tougher comps as we lap the recovery of travel.”
Online Travel: Consumer demand strong
From Airbnb Q4 Call:
“You have to actually rewind the tapes and remind yourself that we were just exiting kind of Omicron, and there's a lot of pent-up demand in January of last year, which makes for some harder comps in Q1. But against those harder comps, we're continuing to see strong demand for travel. I think that we continue to see a very robust demand for people staying on Airbnbs versus just necessarily kind of buying other things. So the experiences over things continues to be a big trend.”
From Booking Q4 Call:
“At the start of 2024, we continue to see resiliency in global leisure travel demand. 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.”
“Despite higher ADRs in the fourth quarter, we have not seen a change in the mix of hotel star rating levels being booked or changes in the length of stay that could indicate that consumers are trading down.”
From Expedia Q4 Call:
“On a macro level, we expect travel demand to remain relatively healthy, but we expect growth rates across the world to decelerate, especially early in the year as we lap the post Omicron tailwinds we saw last year. We are still expecting much faster growth internationally outside North America and Western Europe that we expect the gap to continue closing.”
From Trivago Q4 Call:
“Overall, we continue to see hotel demand to be quite robust and at similar levels to prior year.”
From Tripadvisor Q4 Call:
“Our traveler surveys reflect steady travel and spending intent in 2024 with a focus on Experiences as a central component.”
Airlines: Demand Strong, Especially Domestic Corporate
From American Airlines Q4 Call:
“Demand remains strong, and we've seen robust bookings to start the year, as travel trends have begun to normalize across entities. We're also very encouraged by the trends we're seeing in business travel. Domestic revenues from business travel ended the fourth quarter at approximately 90% of 2019 levels”
“But, as I've said, even earlier today, we expect demand to be very strong. The spring and summer, I think are going to be exceptional times for us in terms of demand for product.”
From United Airlines Q4 Call:
“We expect TRASM in Q1 to be approximately flat year-over-year, which is a nice sequential improvement versus the past few quarters. Domestic demand remains strong with increases in business traffic volumes year-over-year in addition to stronger pricing thus far this year and we expect domestic year-over-year PRASM to be positive for the quarter. We see the best yield growth current on tickets purchased within a week of departure.”
From Delta Airlines Q4 Call:
“We expect demand to remain strong, particularly for the premium experiences that Delta provides. Consumers spend is continuing to shift from goods to services, and our customer base is in a healthy financial position with travel remaining a top priority. And corporate travel continues to improve with demand accelerating into year-end.”
From Southwest Airlines Q4 Call:
“I mean, the way that we closed the fourth quarter, we saw a close-in performance kind of accelerate in the holiday time period which had us -- you know, we came in above our expectations at that point…I think demand looks very strong, you know, in January and February, which are typically trough periods here.”
From JetBlue Q4 Call:
“Looking ahead, for the first quarter, we are seeing positive momentum in our revenue. Demand during peak periods remains strong and we have better match our capacity to demand during off-peak. International demand remains very healthy and the domestic revenue environment is improving as industry capacity has been moderating.”
From Alaska Air Q4 Call:
“The good news is, it seems like demand is holding very well into the first quarter of this year. I think the airlines across the border are starting to understand that demand is looking a little different than it did pre-COVID, but probably not as different as we all thought it might have been.”
From Frontier Airlines Q4 Call:
“We're obviously working very hard internally in terms of restructuring the network that's providing a significant improvement as you progress through March, April, May and June. And also, you're seeing very strong demand in the short term, improving close-in pricing. So built into our guide is a sequential improvement over the last few quarters on our unit revenues.”
From Spirit Airlines Q4 Call:
“Domestic demand over the peak holiday period and early trends we are seeing for spring break give us confidence that we will see more normalized demand trends for domestic travel this summer.”
From Allegiant Air Q4 Call:
“The spread we see between where peaks are and off-peaks are, while obviously, everything is meaningfully above pre-pandemic still, that spread looks about like it did pre-pandemic. So whatever you deem as the normal variance there is kind of what we're seeing.”
From Hawaiian Airlines Q4 Call:
“And we're expecting a modest pace of recovery of demand recovery in the short term, given the weakness of the yen and the compounding effect of Hawaii lodging inflation. Strength in the US and other points-of-sale including connections beyond Japan has helped offset the slower return of Japan point-of-sale traffic.”
Hotels: SMB and Leisure strong, corporate recovering still
From Hilton Q4 Call:
"Our consumer's median income levels, reasonably good, it's in the $140,000 to $150,000 range. They still have plenty of money, plenty of desire to travel."
“We do think that by the time we finish this year, assuming -- sort of the broader consensus view of a reasonably soft landing, that by the time we get to the end of the year, we think you'll be at more normalized levels of demand, and we believe, given very low supply numbers that are continuing and continued decent economic growth, that we're going to continue to have pricing power there and everywhere else.”
From Marriott Q4 Call:
“Demand from small and medium-sized corporates remained robust and while large corporates are still lagging they continue to post volume increases.”
“The demand for all types of travel remains strong even as the rebound impact from the pandemic has waned. The fundamentals for our industry are outstanding and we are determined to grow our industry-leading position.”
From Choice Hotels Q4 Call:
“We're feeling confident Americans are still prioritizing their travel budgets with with 80% of Americans planning to travel this year and most expected to increase the amount they're spending on travel. So we think the business has quite a bit of room to grow. We're still below in terms of occupancy, our pre-pandemic levels.”
Cruise: No slowdown in consumer demand for cruises
From Carnival Cruise Q4 Call:
“But taking a greater share of folks who have never cruised before is part of the strategy to increase overall demand, get them in our pipeline, and allow us to raise pricing over time for, frankly, everybody.”
From Royal Caribbean Q4 Call:
“If you think about consumer demand for 2024 and beyond, we look to both macro trends and data points for millions of daily interactions with our customers. We continue to see a very positive sentiment from our customers bolstered by strong labor markets, high wages, surplus savings and elevated levels. Year-over-year growth in spend on experiences is double on goods”
Rental Cars: Corporate recovering and leisure still strong
From Hertz Q4 Call:
“We entered 2024 with solid demand in a stable rate environment. We expect demand to track to historical seasonal patterns and anticipate supporting RPD through initiatives such as bigger monetization of upgrades, incremental value-added services revenue through digital channels and improved price capture in our value brands.”
“First of all, leisure business and leisure demand is really quite strong, and we're seeing considerable volumes across the sort of Sunbelt from Florida all the way west to Hawaii, Hawaii making sort of a considerable rebound. We've seen larger inbound activity growth, and we've seen strong corporate growth, particularly in the Midwest, locations like Detroit and Chicago that are showing high volume.”
From Avis Budget Q4 Call:
“Going forward, as I mentioned, travel in general is strong, and we are expecting demand to grow as well with the course of this year. As we move from January to the remaining months in the quarter, we'll take advantage of both business and leisure activity, warm vacation destinations and early Easter with improved inbound activity continuing into the spring and summer with elevated travel.”
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