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25.08.2023 - 14:22 / skift.com / Asia Pacific
Mastercard Inc forecast current-quarter revenue growth short of Wall Street estimates on Thursday, saying the boost from pent-up demand for travel will diminish going forward.
The payments company said travel to most regions had recovered to levels seen before the pandemic, fanning fears of a tough environment in 2023 as the economy loses steam, sending its shares down nearly 2% to $375.11.
After the Federal Reserve’s rate hikes for most of last year, the economy has begun to show some signs of slowing down, with wide-ranging layoffs and fears of a recession spooking consumers into saving more, which is likely to impact travel growth.
“The vast majority of the regions have now reached that state where they are kind of growing at a healthy pace, but not at an accelerating pace,” Chief Financial Officer Sachin Mehra said, adding that Asia Pacific is an exception as it still has room for growth as China reopens.
“Mastercard’s payment volume growth in Q4 2022 remained strong. The question, however, is how long this momentum will be sustained,” said Kevin Kennedy, analyst at investment research firm Third Bridge.
Cross-border volume, which tracks spending on cards beyond the country of its issue and is a gauge for travel demand, was up 42% through the first three weeks of January.
But that growth was largely owed to a lower base last year when the Omicron variant of the coronavirus was spreading, Jefferies analysts wrote in a note.
Mastercard said it expects first-quarter revenue to grow at the “high-end of high-single digits range”, while analysts had estimated a growth of 10.7%, according to Refinitiv IBES data.
Downbeat forecast overshadowed the company’s profit beat in the fourth quarter.
Excluding one-time items, Mastercard earned $2.65 per share for the three months ended Dec. 31, compared with analysts’ average estimate of $2.58 per share.
Net revenue climbed 12% to $5.8 billion.
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Cricket is the most popular sport in India and has a huge fan base. Beyond just being a sport, it is deeply embedded in the nation’s culture, evoking intense emotions from the masses over the victories and losses of their favorite teams: 90% of the global cricket fandom consists of Indians, highlighting the cricket craze in the country.
American Express Global Business Travel has partnered with Emirates Group-owned dnata to offer its global clients more local expertise in the Middle East region.
Skift Research has been tracking the performance of the major travel sectors in 22 countries since the beginning of the pandemic in the Skift Travel Health Index. We have seen a steady upward trend, but the final push to full recovery seems more stubborn than we initially thought.
Australia’s Qantas Airways Ltd raised its first-half pre-tax profit outlook on Wednesday on strong travel demand, with limits on international capacity helping boost domestic tourism, sending its shares to more than a two-year high.
Faced with lower-than expected occupancy and sluggish subscription sales, luxury travel brand Inspirato lowered its 2022 financial guidance, and transferred one-third of its salesforce and marketing personnel to new or expanded segments it is targeting, namely business travel and philanthropy.
Even though China’s recent relaxation of Covid measures is widely seen as a step forward for travel, Trip.com is still cautious in the very near term as winter is usually a slack season for both business and leisure travel.
Here are some excerpts from Daily Lodging Report from the past week. If you’re not a subscriber, you should be. Get news on hotel deals, development, stocks, and career moves. Sign up here, now.
While the tech sector faces the blues, the travel sector is still moving in a positive direction. You can see this in the last month of earnings reports, as well as from exclusive Skift Research surveys. Although not fully recovered completely, the travel industry gained substantial momentum at the start of the year. All regions have almost recovered from the pandemic blues, Asia Pacific being the only exception. But with loosening travel restrictions and China reopening, we expect a stronger travel industry to be less uneven this year.
Marriott Vacations Worldwide Corp‘s new CEO John Geller said on Thursday that the company’s fourth-quarter earnings underscored continued strength in leisure demand for its timeshare properties, package tours, and other offerings for travelers, despite talk of economic uncertainty.
Travel search volume in the Asia Pacific region rose over 50 percent year over year in the fourth quarter last year, according to Expedia Group. The region’s strong performance led global travel search volume, which rose by 10 percent year over year.
India could rank among the top three markets for outbound travel in the coming years, according to Omri Morgenshtern, CEO of online travel platform Agoda said while speaking to media in India during his recent visit to the country. Indian travellers are increasingly becoming more important to many countries and will become second to China in terms of spending in Asia, he said. An earlier Skift article had reported how the time is ripe for India — which already ticks most of the boxes as a suitable candidate to take over from China as the largest travel source market — to enter the dragon’s space. In India, online travel booking is growing at a faster pace after the pandemic in comparison to other global markets, outpacing the Asia Pacific market, said Morgenshtern. The total transaction value in travel almost hit pre-Covid levels in 2022. “Since 2019, the rank of importance of Indian tourists for Thailand for example has risen from 10th to 6th. I expect it to become more important in the coming years, not only to Thailand but to many countries in APAC,” he added. Morgenshtern also sees a lot of potential for inbound tourism in India. While India’s inbound is growing slower than outbound travel, he believes it is going to see fast growth in the coming years.