In This Article:
(Bloomberg) -- Russia’s invasion of Ukraine caused many people to rethink their travel plans, but some of the top industry executives are still expecting one of the best summer seasons ever after more than two years of pent-up demand.
Most Read from Bloomberg
-
Ukraine Update: Russia Keeps Up Shelling Ahead of More Talks
-
Kremlin Embrace of Neutral-Ukraine Plan Sparks Hope on Talks
-
Luxury Cruise Ship Runs Aground While Leaving Caribbean Port
-
Xi Spurs Frantic Stock Buying With Lifeline for China Market
“This is a terrible tragic local event,” Booking Holdings Inc. Chief Executive Officer Glenn Fogel said at a Bank of America conference on Tuesday. But Fogel said that despite Americans likely feeling “angry and sad” about the war, he doesn’t believe they are going to change their travel plans. Even with the potential for higher airfare due to spiking jet fuel prices, Fogel said a “significant amount of travel that did not happen over the last two years has built up this incredible amount of demand, and this latent demand just wanted to burst out and travel.”
Booking, which gets about 90% of its revenue from international markets, said in a securities filing on Tuesday that room nights booked declined by roughly 10% against 2019 levels for the week ended March 6. Much of that was driven by Russia and Eastern Europe, while Western Europe “remains modestly above 2019 levels,” the company said.
The report and executive comments helped reassure the market, sending Booking shares up almost 5% that day. The stock had collapsed almost 30% between the company’s mid-February earnings report and the first week of March.
Booking, Expedia Group Inc. and Airbnb Inc. are all banking on a surge in demand this summer. The travel companies had been pummeled by pandemic restrictions and subsequent waves of the resurgent Covid-19. And while Airbnb benefited from people taking advantage of flexible work options to book stays in homes in more rural locales, Expedia and Booking were anxiously awaiting tourists’ return to cities.
Expedia CEO Peter Kern said in a mid-February interview before the war broke out that he expected the summer of 2022 to be “the biggest summer ever for travel.” He was also anticipating that people would be looking at cities, betting that they are “tired of going to national parks.” He predicted cities in Europe with loads of cultural attractions and dining options -- like Paris and London and Florence, Italy -- would see enormous demand.
Speaking Thursday at Morgan Stanley’s Technology, Media and Telecom conference, Airbnb CEO Brian Chesky said he’s “feeling obviously really good about where our business is,” and that he sees “no major changes” to travel behavior in the last month. Airbnb has suspended operations in Russia and Belarus, and Ukraine isn’t receiving bookings except for humanitarian aid.