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World Cup Boost to Benefit Hotels as Middle East Tensions Weigh on Online Travel Earnings
U.S. travel companies are poised for a divergent second-quarter earnings season, as a boost from the FIFA World Cup is expected to lift hotel operators while geopolitical tensions in the Middle East may lead to conservative forecasts from online travel platforms. Investors will be closely watching guidance from major players starting next week for signs of underlying travel demand.
Hotels Score on World Cup Demand
Hotel chains are anticipated to report strong quarterly results, driven by resilient travel demand and premium pricing during the FIFA World Cup. Analysts at BofA Global Research have dubbed hotels "the real World Cup winner" from the event, a sentiment supported by strong performance in the luxury and upper-upscale segments, according to analysis from Jefferies.
However, some industry experts caution that the lift may be temporary. Bookit CEO Lin Dai told Reuters the surge was "a three-week event, not a trend line," noting that revenue gains came from higher room rates rather than a significant increase in traveler volume. Consequently, investors will be focused on the sector's outlook beyond the one-time event. "The focus is the underlying growth trend going forward, excluding World Cup," said Baird analyst Michael Bellisario.
Cautious Outlook for Online Travel Firms
In contrast, online travel agencies (OTAs) are expected to present a more cautious outlook. Brokerage BTIG anticipates softer forecasts due to uncertainty in the Middle East, where travel cancellations reportedly peaked in March and April. The firm noted that this geopolitical risk "hits Booking the hardest."
AdAirbnb may be an exception among its online peers. An analyst at Bernstein expects the company to "have been the biggest beneficiary in the online travel sector" due to its strategy of leveraging the World Cup to increase its property listings. Longer-term concerns about competition from AI agents also linger over the sector. "Expedia’s core function — search and compare and aggregate — is exactly what an AI agent replaces," said Jeff Barrington, managing director at Windsor Drake.
Key Earnings Dates
Key travel industry earnings reports are scheduled over the coming weeks:
- Hilton Worldwide: July 28
- Marriott International: August 3
- Booking Holdings: August 4
- Expedia Group: August 5
- Airbnb: August 6
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