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Business travel has failed to return post-COVID and that’s hurting the bottom lines of hotel and airline companies. And in a challenging U.S. economic environment, companies are tightening their belts.
“It’s not like the pent-up demand you have for leisure travel,” explains Gaming, Lodging and Leisure analyst Todd Jordan in this clip from The Call @ Hedgeye. “You don’t really have that for business transient. And the companies are under pressure, so why are they going to release the purse strings for expensing travel? I think it’s only going to get worse.”
The hotels, in particular, are struggling, Jordan says, and when you add in the rising cost of hotel rooms it’s the “nail in the coffin” for business travel.
On the leisure travel side of the equation, and in an entirely different sector, Communications analyst Andrew Freedman sees a similar post-COVID trend playing out. Specifically, entertainment company Live Nation (LYV) saw a spike in demand after the Omicron variant. That pent-up demand is steadily tapering off in the past year.
“We saw a very high level of on-sale activity in the summer period,” Freedman says about LYV. “Q2 and Q3 last year were highly concentrated, and much stronger than what the steady state trend of the business is.”
Watch the full clip above.
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