Skift Take

When the U.S. election (presumably) concludes on Tuesday, companies might be able to invest in travel with a little more certainty about their return on investment. Vacationers will likely be looking to take a break from the tense political climate in the U.S., as well.

Everyone, including travel industry executives, is relieved the U.S. election is almost over. The uncertainty over the outcome of the election, however, has impacted business in the last few months, according to many.

Recent comments from executives at Hilton Worldwide, Travelport, and Carnival Corp. during quarterly earnings calls reflect a great amount of trepidation tied to the U.S. elections among customers who would normally book travel at this time of the year, and some impact on volumes.

“I talk to a lot of other CEOs. They talk to a lot of our biggest customers. I would say that there is a sort of view right now, particularly exacerbated by the U.S. election cycle, that everybody is nervous,” said Hilton Worldwide CEO Chris Nassetta.

“I think this cycle of election… [has] been an unusual cycle, and as a consequence, I think it has slowed down the economy probably more dramatically than I’ve seen certainly in my adult life, just in the sense of creating such an aura of uncertainty that people are sort of waiting to make decisions until it’s over. Now but we don’t know what’s going to happen, but the one thing we do know is it’ll be over on November 8. By the time we close out at midnight, we’re going to have certainty of who our next president is going to be. And I think just the fact of having that type of certainty is going to be beneficial.”

Hilton missed its revenue target in the third quarter, but Nassetta said he is optimistic about the chain’s fundamentals moving forward.

Among companies that provide booking technology to travel providers, the tone was mixed. Madrid-based Amadeus reported strong growth, and Texas-headquartered Sabre reported some problems related to its business in Europe. Neither mentioned reduced demand in North America.

Travelport, a global distribution system company that competes against Sabre and Amadeus, however, noted uncertainty resulting in reduced bookings.

“We saw a definite slowdown in September; we haven’t seen it increase much in October,” said Travelport CEO Gordon Wilson. “[Bookings] tend to bounce back a bit after the presidential election. But it is such an uncertain climate at the moment that we’re a little bit cautious conservative in our view. We continue to see Europe and Asia performing well. So it’s largely U.S. phenomena at the moment.”

It’s likely that reduced corporate bookings have contributed to some weakness, with companies hesitant to invest in travel considering the uncertain state of the U.S. economy.

Hotel giants, as well, reported a sizable decrease in both bookings made since June and their outlook for the rest of 2016.

“Looking forward, booking pace for the fourth quarter is down slightly versus last year, reflecting a challenging quarter that includes both the Jewish holidays and the U.S. Presidential election,” said Hyatt Hotels Corp. CEO Mark Hoplamazian.

The demand drop seems to have had less of an impact on cruise brands. Cruising, always a cheap vacation option, may be more resilient compared to other, more expensive types of vacations.

“We’ve anticipated a bit of an election slowdown, as historically there’s always been a little fall off in booking volumes around election time,” said Carnival Corp. CEO Arnold Donald in September. “And so there could be some of that, but in our case again, right now we’re doing so well, and we’re so far ahead and the pricing is strong. We’ve got great close-in pricing right now and so it’s been very good.”

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Tags: bookings, carnival, earnings, hilton, hyatt, politics, travelport, usa

Photo credit: Election anxiety has led consumers to put off travel bookings, according to many industry executives. The Trump International Hotel & Tower in Chicago is pictured here. Giuseppe Milo / Flickr

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