Although still down from 2024, travel trends are improving, according to data compiled by Wedbush, suggesting a more favorable range of outcomes this year versus initial expectations.
But the progress is not being experienced equally across the industry, Wedbush’s Scott Devitt found, with international demand remaining healthy while hotel booking trends, including alternative lodging, showing a deceleration in July.
For names like Airbnb (NASDAQ:ABNB), the data suggests the implied results are trending below management guidance and consensus estimates that call for stable nights booked growth. For the third quarter, Wedbush estimates room night growth of 7.1% year-over-year, versus +7.4% growth for Q2.
For Booking.com (NASDAQ:BKNG) demand growth has remained healthy in Europe, but continues to slow, with nights booked rising 5% year-over-year in July but decelerating 500 basis points from +10% year-over-year in Q2. Travel trends outside the U.S. have been softer versus the second quarter, and performance is tracking in line with expectations. This indicates Q3 room night growth of +5.5% year over year from +7.7% in the second quarter,
Finally, travel trends have been encouraging for Expedia (NASDAQ:EXPE) relative to initial expectations. In July alternative lodging nights booked growth has decelerated ~300 basis points from Q2 to +1% year-over-year (pertaining to the company’s Vrbo business), while U.S. hotel data was consistent with prior months, suggesting only slightly negative RevPAR growth in July.
Air travel has improved slightly in early Q3, averaging ~1% growth from roughly flat growth in Q2. Wedbush’s data shows inbound air travel from Europe to the U.S. was down 3% in July year-over-year while outbound air travel for the U.S. to Europe improved by 6% from +4% year-over-year in the second quarter.