Erick Mokaya's avatar
$103.9m follower assets
Erick Mokaya's avatar
$103.9m follower assets
Visa. Microsoft and Alphabet Reporting Today AMC
The Travel Sector Needs Corporate Travel Back
The travel sector continues to be hit by COVID-19. Almost two years into the start of the pandemic and most companies in the travel sector are still well-below their pre-pandemic levels. However, there's optimism among the industry executives that travel will come back strong in the coming year.

The latest Fincredible MacroTalk goes over what company executives are seeing regarding the demand for travel. Here are three quotes that stood out to me:

  • $HLT: “Business travel continued to gain momentum, with midweek occupancy and rates improving meaningfully versus the second quarter. In the quarter, business transient room nights were roughly 75% of prior peak levels. Studies show that nearly 70% of U.S. businesses are back on the road, up 28 points from the end of the second quarter. With roughly 80% of our typical corporate mix coming from small- and medium-sized businesses and with the lagging recovery of larger corporate travel, we've taken the opportunity to continue our work from before COVID to further increase our focus on this segment of demand.”

  • $ABNB: “On October 15, I believe it was that date that President Biden announced the reopening of the borders for international travelers come to the United States. Within 1 week of that announcement, we saw a 44% spike in nights booked for stays, crossing borders coming into the United States on Airbnb for stays November 9 and later, which is when the borders would open. So what we are seeing kind of across the board is evidence of pent-up demand.”

  • $DAL“We hear regularly from our corporate customers that they're ready to get back to travel, see their clients face-to-face to renew business relationships and develop new ones. That sentiment is coming through loud and clear in our most recent corporate surveys. More than 90% of our respondents mentioned that they expect travel volumes in the December quarter to either be the same or outpace September quarter. Nearly 60% of our accounts are telling us that they've already reopened their offices with an additional 10% expected to open their offices before year-end.”

It's clear that demand for leisure travel is strong. All of the quotes in the MacroTalk point towards pent-up demand for leisure travel. When allowed, people are going on vacation and traveling.

However, corporate travel is still lagging. The decision to travel or not is a lot more complicated for companies, which has resulted in muted demand for corporate travel this year. There's hope that next year the demand for corporate travel will pick up, but there's no guarantee it will. Without corporate travel, a lot of travel stocks face an uphill battle.

If you'd like to read the whole post, here's the link: Fincredible MacroTalk December 15: Travel Demand.
Hi Alberto this is a great memo ! I am curious to know which companies you believe are best equipped for the uphill battle if corporate travel were to take longer to pick up?
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