Booking Site Declines in June Could Signal Softening of Blockbuster Summer
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Editor’s Note: Every Wednesday, Executive Editor and online travel rockstar Dennis Schaal will bring readers exclusive reporting and insight into the business of online travel and digital booking, and how this sector has an impact across the travel industry.Online Travel This Week
Online travel agency traffic declines in June may mean that all the talk about the most frenetic summer travel season in memory may turn out to be somewhat muted, and the second half of 2022 may be challenging.
If that isn’t dour enough, new Covid sub-variants are becoming dominant and Monkeypox is gaining ground.
Two published reports point to a softening in June as the Ukraine war; raging inflation, including soaring gas prices; flight disruptions; and the nagging labor shortage dent all of that pent-up demand to travel.
In a research note, Is Travel Recovery Losing Steam?, BTIG analysts Jake Fuller and Clark Lampen wrote of month-to-month comparisons: “Traffic for Airbnb went from +6 percent in May to -2 percent in June, and Booking Holdings from +5 percent to -4 percent. Expedia’s declines widened from -8 percent to -17 percent.” All of these monthly figures are comparisons to the same month in 2019.
While Airbnb (+ 5 percent) and Booking (+29 percent) are still growing on a year-over-year basis, Expedia — largely because of a substantial decline at its vacation rental division Vrbo (-16 percent) — is down (-2 percent), the report said.
Vrbo has been Expedia Group’s strongest performer throughout much of the pandemic, but it now appears to be retrenching a bit perhaps as hotels and cities come back.
The BTIG report said both Booking and Expedia eased up on their paid search engine marketing efforts in June as demand softened.
BTIG still envisions a robust summer for online travel agencies, but expressed concern that “macro pressure,” including recession possibilities, “could weigh on bookings for stays in future periods.”
SimilarWeb, too, saw “consumer weakness and price sensitivity” emerge in June bookings, according to its Digital Consumer Demand and Market Dynamics report.
While SimilarWeb still forecasted “a blowout summer” for travel demand, the report said the second half of 2022 “will bring significant challenges to the industry.”
“Booking.com was the only site to increase bookings month over month in Europe, the Middle East and Africa,” SimilarWeb stated.
Perhaps Booking.com is just making up for the weakness it showed earlier when much of Europe was locked down.
So far this year, the online travel agencies have lost ground to lodging suppliers and vacation rental sites, the report found, “but cross-shopping between vacation rental and OTA players is increasing as deal-seeking behaviors grow in response to inflation prices,” the report said.
In Brief
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