By Anshuman Tripathy and Megavarshini G. Somasundaram
July 24 (Reuters) – A host of U.S. hotel operators and online travel platforms are set to release second-quarter earnings starting next week, and investors will weigh optimism from a FIFA World Cup boost against concerns over disruption due to Middle East tensions.
Hotel operators are poised to ride the FIFA wave on resilient travel demand and strong hotel and airfare pricing, while online platforms such as Booking Holdings are expected to remain conservative with forecasts.
“Hotels are the real World Cup winner,” analysts at BofA Global Research said.
Hotel operators, however, will also need to raise full-year forecasts to fuel the sector’s momentum, analysts said.
ONLINE TRAVEL FIRMS MIGHT GUIDE SOFTER
Worries about AI agents such as ChatGPT and Gemini taking over the booking process have crept into the share performance of online travel companies.
“Expedia’s core function — search and compare and aggregate — is exactly what an AI agent replaces,” said Jeff Barrington, managing director at Windsor Drake.
Brokerage BTIG expects softer forecasts from online travel firms due to uncertainty in the Middle East, where cancellations peaked in March and April, with these companies historically being conservative with their forecasts.
“That risk hits Booking the hardest,” it said, adding the company’s full-year guide had assumed the U.S.-Israeli war on Iran would end by June 30.
Airbnb stands out as an exception, analysts said.
“We expect Airbnb to have been the biggest beneficiary in the online travel sector given its focus on leveraging the event (World Cup) to add supply,” said Bernstein analyst Richard Clarke.
HOTELS RIDE WORLD CUP WAVE
Strong domestic demand and premium pricing, especially during the World Cup, are set to drive solid second-quarter results for hotel chains, offsetting weaker Middle East revenue.
Luxury and upper-upscale segments drove a strong quarter, Jefferies said, adding ongoing geopolitical events have yet to impact leisure or business travel.
However, any lift that shows up in second-quarter hotel earnings out of World Cup host markets is “a three-week event, not a trend line,” Bookit CEO Lin Dai told Reuters.
“U.S. hotels charged more for the World Cup without actually filling more rooms… Revenue climbed because rooms got expensive, while the number of people actually traveling barely moved. And the spike is already gone.”
Hilton Worldwide reports results on July 28, followed by Marriott International on August 3, Booking Holdings on August 4, Expedia Group on August 5 and Airbnb on August 6.
“The focus is the underlying growth trend going forward, excluding World Cup,” said Baird analyst Michael Bellisario.
(Reporting by Anshuman Tripathy and Megavarshini G. Somasundaram in Bengaluru; Editing by Arpan Varghese and Pooja Desai)
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