Skift Take

Please check your pandemic-era assumptions at the door. Hotels have gained ground on online travel agencies. Also, the blockbuster summer travel season may be slightly less so.

Dennis Schaal

Online Travel This Week

Online travel agency traffic declines in June, compared to May, 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.”

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.

Whle 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

Airbnb Removes 16-Person Maximum on Stays

Airbnb axed its prior guest limit of 16 people at a property, and at the same time made its heretofore house party ban permanent. But isn’t a reservation of 16 or 20 people in a home a recipe for things getting out of hand? Skift

Median Employee Pay Disparities Revealed at Booking Sites

While much of the focus might be on the highest paid online travel agency CEOs in 2021, our story also highlighted the pay disparities for employees at Airbnb versus Expedia, Tripadvisor and Booking Holdings. Skift

Booking.com Makes Strides in Asia-Pacific

Booking.com’s recovery in Asia-Pacific may be outpacing the travel recovery in the region as a whole. Headwinds from China and Japan, however, stand in the way of a more robust comeback. Skift

Skyscanner and Gogobot Acquisitions Pay Off for Trip.com Group

No one envisioned that the much-wooed Chinese traveler would cease traveling internationally when the company that was then known as Ctrip bought Skyscanner and Tripcom/Gogobot in 2016 and 2017, respectively. But one perhaps unintended consequence of those acquisitions is that they have given China’s Trip.com Group a hedge against the demise of China outbound travel. Skift