Lake Como, in northern Italy, conjures images of glistening blue water, opulent villas and villages where celebrities like Taylor Swift, Travis Kelce, and Amal and George Clooney try to dodge the paparazzi.
05.08.2024 - 22:49 / skift.com / Sarah Kopit
After 15 years without a recession (ex-Covid), Friday’s jobs report has sent U.S. markets into a freefall and has a lot of people whispering the R-word. Here’s what’s going on and what it means for the travel industry.
A trifecta of bad economic news has roiled American markets, which are in the middle of a sell-off after a huge run earlier this summer. Here’s why:
A bloodbath. The S&P 500 is down roughly 8% from the peak hit just last month. The Nasdaq, more exposed to tech stocks, is down more than 12%.
Our own Skift Travel 200 index hit a high in March and came close to that high again in mid-July. It’s down more than 13% since March.
The selloff in the travel stocks began to accelerate at the end of last week, with a 4% drop for the ST 200 on Friday. This was the biggest decline in the ST 200 index since June 2022. Booking Holdings was down more than 9% and Expedia Group and Airbnb both fell nearly 5%. Hotel groups were relatively less affected, with Hilton and Marriott down only around 2%. European hotel group Accor was down nearly 5%, after losing more than 15% last month.
Claudia Sahm, Chief Economist at New Century Advisors, said her “Sahm Rule,” an early warning sign of recessions, has been triggered by the increase in the unemployment rate.
“We’re not in a recession. We are in a place where things have slowed,” Sahm said on CNBC Friday. “So we’re not in contraction territory. What is very worrisome – and today’s employment report underscored – is the direction of travel, the momentum is not good. We are pointing towards what would be recessionary dynamics.”
Since the pandemic, the travel industry has been on an absolute tear, breaking record after record. But now we’re seeing signs of a pull back in some areas. Here’s a sector by sector look:
Airlines. Since 2022, airlines worldwide have enjoyed robust demand. But that was also underpinned by a healthy U.S. economy. Airlines are thus understandably concerned as they digest this flurry of new data.
If there is a recession, and Americans do feel less wealthy, it could benefit low-cost carriers – they tend to do well when budgets are tight. On the opposite end of the spectrum are big airlines like United and Delta, the two U.S. superstars of the industry during the post-pandmeic era. Much of their recent success stems from premium longhaul demand, fueled by travelers willing to spend more freely.
On the earnings front, here’s what they had to say:
Hotels. There’s bound to be a bit of cognitive dissonance when hearing about travel softening for anyone who has traveled to hotspots like New York, London, Tokyo, or Madrid this summer and felt jostled by hordes of American tourists. But some early signals from hotel earnings suggest signs
Lake Como, in northern Italy, conjures images of glistening blue water, opulent villas and villages where celebrities like Taylor Swift, Travis Kelce, and Amal and George Clooney try to dodge the paparazzi.
In an effort to speed up the process for its citizens who fly, Australia has said it will join the United States airport security programs.
Dangerous wildfires near Athens, Greece forced hundreds to evacuate the suburbs north of the country's capital on Monday, August 12, reported to be the worst fire the Mediterranean country has seen so far this year.
If you’re an avid traveler (and even if not), you’ve probably heard the rumblings that sometime soon the 3.4 oz. TSA liquids rule is going to change. Currently, you’re not allowed to bring containers larger than 3.4 ounces (or 100 ml) of liquids, gels, or aerosols through security. Commonly referred to as the “3-1-1” rule, it traces its origins back to a failed plot in 2006 when terrorists in the U.K. tried to smuggle liquid explosives onto planes. The rules were originally intended to be temporary but nearly 20 years later remain in place.
Europe dominates in a new ranking of the world’s most beautiful cities, filling nine of the top 10 spots.
As someone who's traveled to over 40 countries, there was one thing I never checked off my travel bucket list: flying business class. I always walked past the lie-flat seats and dreamed one day I would be able to.
Landal GreenParks UK, the UK’s fastest growing company offering holiday breaks in nature, has seen a 24% YoY increase in summer bookings driven by longer staycations in the Southwest region.
Three fliers who were impacted by CrowdStrike’s global computer outage last month have filed a proposed class action lawsuit in Austin, Texas, blaming the company for negligence and asking CrowdStrike to pay impacted air travelers compensatory and punitive damages.
Update: August 6, 2024, at 8:05 a.m. ET
UPDATE: August 4, 2024 at 8:00 p.m. ET
Travel stocks were the best performers Monday, a day when the broader U.S stock market had its worst day in years – but don’t get too excited. Fact is, travel had front-loaded the pain. While it was Monday’s performing sector, the travel sector has been the performing group of stocks over the past week and past year.
Good morning from Skift. It’s Tuesday, August 6, and now here’s what you need to know about the business of travel today.