Booking CFO: Inflation Continues to Scare US Travelers
Booking.com says the impact of inflation continues to hamstring the U.S. travel industry.
Demand is down as cautious consumers hold off on making their vacation plans, Ewout Steenbergen, the online travel platform’s finance chief, told Bloomberg News in an interview published Tuesday (Dec. 17).
“We haven’t seen so much of a movement in the U.S. around the booking window recently,” Steenbergen said.
He was referring, the report said, to a measure of how far in advance a traveler books a trip, with a shorter window signifying that consumers are waiting to pencil in their vacations.
That’s what’s the opposite of what’s happening in Europe, Steenbergen said when the company announced its earnings recently, with travelers booking earlier, planning to go skiing in February or trips during the Easter holidays.
Bloomberg noted that his remarks highlight a moderation in the travel sector after a boom following the pandemic. Booking.com is the largest online travel company by market value and typically serves as an industry bellwether.
Right now, demand is lower in the U.S. than other parts of the world, Steenbergen said, thanks to a “bifurcation”: luxury travel demand is still strong, while lower-income travelers are feeling pressured, with some trading down for shorter trips or lower-quality lodging.
Still, he told Bloomberg he expects trends in the U.S. to improve, as consumers continue to prioritize short trips over other discretionary purchases.
“We would expect at some point that to start to normalize and get stronger, particularly once the impact of inflation has worked through the economy,” he said of the American market.
Last month, Booking Holdings, the website’s parent, announced it was conducting a companywide review that would include “an expected workforce reduction,” as well as cost cuts like looking for real estate savings and optimizing procurement.
“We believe these efforts will improve operating expense efficiency, increase organizational agility, free up resources that can be reinvested into further improving our offering to both travelers and partners, and better position the company for the long term,” the company said in a regulatory filing. “We will be consulting with works councils, employee representatives, and other relevant organizations, and expect to develop more clarity on these organizational changes, including with respect to timing, expected impact on employees, financial impact, and other aspects of the contemplated changes in due course.”
The post Booking CFO: Inflation Continues to Scare US Travelers appeared first on PYMNTS.com.