Travel companies see rough roads ahead. This week, the hotel giant Marriott cut its revenue expectations for 2025. The news comes after Hilton and Hyatt did the same, along with a slew of airlines.
Leaders of these businesses say many travelers are less willing to spend right now — but that’s not the case for every single traveler.
Sarah Fazendin runs Videre Travel, a consultancy that, according to its website, is “in the vanguard of luxury travel.”
“Big things, you know: African safaris, all the big bucket list destinations,” she said.
Amid the economic uncertainty right now, Fazendin said that her well-to-do clients are taking longer to book trips. For her, “it definitely makes a business owner nervous.”
But they are booking — often at accommodations with four-figure nightly rates. And they’re certainly not flying coach.
“To fly to, you know, Dubai, it's really uncomfortable to do that unless you're in business class,” Fazendin said. “So people are willing to spend to not ruin their vacation and arrive feeling good.”
This mirrors what airline and hotel CEOs have been saying lately in earnings call after earnings call: for high-end consumers, post-lockdown revenge travel never really stopped.
For everyone else, though, “I think there’s more booking hesitancy,” said Mike Bellisario, senior research analyst at Baird.
Some companies are in wait-and-see mode about corporate travel, he said. They may not be booking that all-staff retreat to, say, a mountain ski lodge just yet.
“If you're a big group that's gonna sign a $20 million piece of business later this year, you probably didn't sign it,” Bellisario said.
And government travel has tanked as President Donald Trump tries to cut federal spending. That sector typically makes up 4% of room demand at Marriott Hotels.
Not huge, “but that varies widely by region, right?” said Jan Freitag, a travel analyst at CoStar. “Obviously, Washington D.C. is completely dependent.”
Some airlines are reporting fewer international travelers coming to the U.S., she said. “United specifically said demand from Canada [is] down 9% from Europe, down 6% for the year. So those are all, you know, sort of manageable numbers, but certainly something that could get worse.”
Still, despite the declining forecasts for travel this year, there’s a rule of thumb that many in the industry live by, per David Katz, a lodging and leisure analyst at Jefferies.
“Travelers will travel, provided that employment holds up, right?” he said. “So if you have a job, you're going on vacation. It's just a question of where and how you get there.”
For those not flying first class to Dubai, Katz said that may mean a road trip will replace air travel altogether for this year’s vacation.
