Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Skyscanner has this option
Speaker 1: that says explore everywhere and I just need to input
Speaker 1: my location. Okay, just put JFK.
Speaker 2: This is Bloomberg reporter Natalie Lung. She told me that
Speaker 2: recently she's been paying a lot of attention to the
Speaker 2: travel website skyscanner.
Speaker 1: And then it shows everything from the cheapest to the
Speaker 1: most expensive, and the next cheapest one outside the US
Speaker 1: is Canada as well as Puerto Rico. So sounds good
Speaker 1: to me. Yeah, yeah, how cheap is cheap? So let's
Speaker 1: see for San Juan is one hundred and fifteen dollars.
Speaker 1: I think it's a one stop flight and.
Speaker 2: I'm seeing some four star hotels.
Speaker 1: Yeah, sounds like a pretty good deal.
Speaker 2: Natalie said she has been browsing skyscanner to find herself
Speaker 2: some cheap vacation options. She's been using it for work. Really.
Speaker 1: I cover tech for Bloomberg in New York, so I
Speaker 1: cover a couple of companies, including in the travel space
Speaker 1: like Airbnb, Expedia, as well as the gig economy, uber
Speaker 1: Lyft and dating apps. So a lot of my coverage
Speaker 1: span across everything that people use on a daily basis.
Speaker 2: And recently Natalie noticed people were using travel booking sites
Speaker 2: like skyscanner differently than they used to. People weren't looking
Speaker 2: for white Lotus inspired holidays in say, Sicily or Hawaii.
Speaker 2: They were looking to go well anywhere.
Speaker 1: I spoke to Skyscanner and they were saying they consistently
Speaker 1: saw people putting everywhere as their destination. So this sort
Speaker 1: of speaks to Okay, people are holding out for deals,
Speaker 1: and it's not that they're not traveling. They're still on
Speaker 1: a travel but they are looking for the perhaps a
Speaker 1: lower star rated hotel or like a cheap of property.
Speaker 2: They'll go anywhere for the right price. Yes, that focus
Speaker 2: on keeping travel costs down seems to mark a big
Speaker 2: shift from the way people were thinking about travel when
Speaker 2: COVID lockdowns first lifted, and it got Natalie thinking, is
Speaker 2: the post pandemic travel boom coming to an end? Today?
Speaker 2: On the show, Americans are back to spending less on travel.
Speaker 2: They're trading in extravagant post COVID trips for budget friendly deals.
Speaker 2: We look at what that means for everything from airlines
Speaker 2: and hospitality to your next vacation. I'm Sarah Holder and
Speaker 2: This is the big take from Blueberg News. At this point,
Speaker 2: the time we spent trapped at home living in a
Speaker 2: COVID pandemic might feel like it all blurs together, but
Speaker 2: Natalie says it's pretty easy to pinpoint exactly when the
Speaker 2: post pandemic travel boom started and where in twenty twenty
Speaker 2: one everyone was in Florida. That was right around the
Speaker 2: time COVID vaccinations first rolled out to the general public,
Speaker 2: and if you weren't a Florida person.
Speaker 1: They went to a lot of national parks that say
Speaker 1: Joshua Tree in California, and even Gatlinburg or Pigeon Fortune
Speaker 1: like Tennessee.
Speaker 2: People were eager to get out, and the travel companies
Speaker 2: Natalie covered, including Expedia and especially Airbnb, found that feeding
Speaker 2: that travel frenzy was a very good business. Last year,
Speaker 2: Airbnb saw record setting profits every quarter.
Speaker 1: It was like not anything like they've seen before before
Speaker 1: the pandemic, and so that was really obviously welcome. After
Speaker 1: they lost almost all their business during the pandemic.
Speaker 2: After lockdowns lifted, there was so much business hosts could
Speaker 2: barely keep up.
Speaker 1: Airbnb hosts in particular added a lot of supply to
Speaker 1: feed that pentup demand.
Speaker 2: Back then, Natalie spoke to one woman who tried to
Speaker 2: cash in on the trend.
Speaker 1: So I actually talked to a host who found a
Speaker 1: home in Orlando because she was hoping to get like Disney,
Speaker 1: you know, travelers.
Speaker 2: But since then, not as many people were clamoring to
Speaker 2: visit the Magic Kingdom or Epcot.
Speaker 1: And she said it was just no activity for the
Speaker 1: month of August, and overall revenue in that Orlando area
Speaker 1: like dropped like six point four percent.
Speaker 2: And it wasn't just Florida recently, people just haven't been
Speaker 2: traveling like they.
Speaker 1: Used to other areas, like the places where I talked
Speaker 1: about in Tennessee near Dollywood was down like eight point
Speaker 1: seven percent. So like, actually, if we look at earlier
Speaker 1: this year, in the past twenty two to twenty three months,
Speaker 1: a lot of US airbnbs saw their earnings drop, and
Speaker 1: so that sort of speaks to the changes in travel patterns.
Speaker 2: And that's led investors, especially to sour on Airbnb. Last week,
Speaker 2: the company reported its earnings and w learn of slowing
Speaker 2: demand that sent share prices down by thirteen percent, its
Speaker 2: biggest dip in nearly two years. Adding to Airbnb's woes
Speaker 2: are a series of local restrictions that have limited the
Speaker 2: number of short term rentals or even banned them entirely.
Speaker 2: But aside from Airbnb, some hotel chains like Hilton, have
Speaker 2: said they've also noticed increasing cost consciousness among their customers.
Speaker 2: Some have tried offering promotions in the hopes of luring
Speaker 2: deal seekers.
Speaker 1: Some hotels, while they're not, you know, cutting prices on moss,
Speaker 1: but they are offering some more perks, such as, you know,
Speaker 1: if you stay for two days, they'll offer another night free,
Speaker 1: as well as perhaps issuing more like loyalty perks for
Speaker 1: their program members.
Speaker 2: And then there are the airlines. The most recent data
Speaker 2: shows that fares from the US to Europe slumped seven
Speaker 2: point five percent in business class and nine point two
Speaker 2: percent in economy from a year earlier. That's led everyone
Speaker 2: from United to Delta to Spirit to lower their financial
Speaker 2: targets and slow plans to expand.
Speaker 1: So you saw a lot of airlines actually slashing prices
Speaker 1: because one of the things that they did was adding
Speaker 1: more airplane seats in anticipation of that coming back of travel.
Speaker 1: But now this sort of demand has not been as
Speaker 1: high as they hoped, and they don't have that price
Speaker 1: power anymore. So, definitely, tic kits are coming down, and
Speaker 1: that's affecting some of their earnings.
Speaker 2: Overall, it seems many of us aren't traveling as much
Speaker 2: this summer, and certainly not as far. According to the
Speaker 2: Conference Board, the share of Americans planning to go on
Speaker 2: a trip abroad in the next six months is at
Speaker 2: the lowest level since the end of twenty twenty two,
Speaker 2: and growth in new US passport applications and issuances slowed
Speaker 2: in twenty twenty three after a post pandemic search. So, Natalie,
Speaker 2: why is this happening? What are experts telling you to
Speaker 2: explain all this like?
Speaker 1: From the number's point of view, even though all the
Speaker 1: numbers are, you know, bigger than it was then in
Speaker 1: twenty nineteen, it's just not growing as the same clip
Speaker 1: as it did after the pandemic, and that sort of
Speaker 1: growth rate, by calculation is going to slow down and moderate.
Speaker 1: So that is what we're seeing so far.
Speaker 2: How much does inflation and economic pressures and a slow
Speaker 2: down in consumer spending generally have to do with this
Speaker 2: change in the travel industry we're seeing.
Speaker 1: Right, So, let's say people's pandemic savings have slowly been
Speaker 1: deepleting because of the up spending they've done in the
Speaker 1: past few years, and with wage growth and jobs growth slowing,
Speaker 1: this is definitely eating into people's discretionary spending and how
Speaker 1: they make choices on where to spend that money.
Speaker 2: But even if consumers are feeling less flesh, that doesn't
Speaker 2: mean people have stopped traveling entirely. Coming up after the break,
Speaker 2: if people are essentially spinning the globe and looking for deals,
Speaker 2: where are they going? And can I come to? After
Speaker 2: a post pandemic flurry of activity, the rapid growth in
Speaker 2: consumer travel is finally slowing down. Bloomberg's Natalie Lung says
Speaker 2: that's partly because people don't have quite as much money
Speaker 2: to spend on vacation these days. But not everyone is
Speaker 2: staying home. They're just finding new budget travel hacks.
Speaker 1: So people are getting smarter. So for airbnbs in like
Speaker 1: let's say, rural smaller towns where you can find multi
Speaker 1: bedroom properties, they have been able to offer like a
Speaker 1: lower price per bedroom, So if you're traveling with a
Speaker 1: group of friends to a smaller town, you might be
Speaker 1: able to find a better deal there. And actually that's
Speaker 1: helped drive group travel up. As one of the fastest
Speaker 1: growing categories for Airbnb. So that's another interesting point where
Speaker 1: hosts are definitely sensitive to and they've been building an
Speaker 1: adding more houses there too.
Speaker 2: Another big change, people are becoming more flexible about when
Speaker 2: they want to fly.
Speaker 1: They're willing to fly at a different time to get
Speaker 1: a better deal. A lot of people say they travel
Speaker 1: during shoulder season, so that's in between the peak seasons
Speaker 1: to sort of get those deals earlier and sole some
Speaker 1: hotel excecutives might have seen July as their peak season,
Speaker 1: but now it's moved earlier to maybe June, and that's
Speaker 1: why that might have influenced sort of that you're on
Speaker 1: you change when you look at, you know, last year's July.
Speaker 2: Does all of this mean this is the perfect time
Speaker 2: to book a trip to a place that used to
Speaker 2: be really over touristy or crowded or expensive.
Speaker 1: Maybe, like, at least from some of the data, we're
Speaker 1: seeing a lot of coastal destinations in Florida cutting prices,
Speaker 1: so maybe you might find a cheap stay or you know,
Speaker 1: a cheap ticket there.
Speaker 2: But Natalie did say some places and some types of
Speaker 2: travel are still booming. Cruises have remained popular as has
Speaker 2: Las Vegas. In fact, the Wind Casino Company recently reported
Speaker 2: its best second quarter profit in the company's history. But
Speaker 2: those are the outliers, and even when CEO said the
Speaker 2: company was paying very close attention to customer behavior. So, Natalie,
Speaker 2: Summer is ending soon, sadly, what's the next big travel
Speaker 2: season that will give us a sense of the health
Speaker 2: of the travel industry and what do experts expect to
Speaker 2: see then?
Speaker 1: So people are looking at the fall travel season and
Speaker 1: so far from the conference calls and you know, earnings reports,
Speaker 1: executives are saying that travel is going to still moderate.
Speaker 1: It's not as strong as before, even with Airbnb noting
Speaker 1: that people are not making those Thanksgiving and Christmas trips
Speaker 1: so far yet, and that speaks to the price sensitivity
Speaker 1: that people might be having there holding out for deals.
Speaker 2: How has reporting all this changed the way that you're
Speaker 2: thinking about travel.
Speaker 1: I'm definitely going to be more savvy and you know,
Speaker 1: seeking out different destinations for travel. Maybe it's a place
Speaker 1: I've never considered for travel before, but if there's a good,
Speaker 1: well priced tour or well priced stay I can find,
Speaker 1: I would be open minded to go there.
Speaker 2: Searching Skyscanner for everywhere. Yes, this is the Big Take
Speaker 2: from Bloomberg News. I'm Sarah Holder. This episode was produced
Speaker 2: by David Fox. It was edited by Aaron Edwards and
Speaker 2: Tim Annett. It was mixed by Blake Maples. It was
Speaker 2: fact checked by Adriana Tapia. Naomi Shaven and Kim Gittelson
Speaker 2: are our senior producers. Our senior editor is Elizabeth Ponso.
Speaker 2: Nicole Beemster Bor is our executive producer. Sage Bauman is
Speaker 2: Bloomberg's head of podcasts. If you liked this episode, make
Speaker 2: sure to subscribe and review The Big Take wherever you
Speaker 2: listen to podcasts. It helps people find the show. Thanks
Speaker 2: so much for listening. We'll be back tomorrow, do you
Speaker 2: s y d.