Business Travel Fades → Leisure Not So Much

09/08/21 11:18AM EDT

Below is an excerpt from a complimentary research note by our Gaming, Lodging & Leisure analyst Todd Jordan. We are pleased to announce our new Sector Pro Product Gaming, Lodging & Leisure Pro. Click HERE to learn more.

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We have highlighted a couple different corporate / business travel related surveys recently in our emails.

The latest survey, which is provided by the US census, provides the most up to date look (through the last week of August) from any survey out there. 

Data is collected weekly across the country among multiple industries so the survey is robust.

As shown in the chart below, expectations for business travel for the next 6-mths are well off their YTD highs and now back to levels not seen since late April. 

We’re not overly shocked to see the numbers given they jive with other surveys and industry data, but to see sentiment trends further weaken into the last week of August is incremental.  We remain bearish on the set up for business transient travel and the impact it will have on US RevPAR. 

PK, XHR, and HST would be names that we’d look to fade on bounces / short against our more leisure focused or special situation picks like EXPE, BKNG, and RHP.           

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Structurally there’s a lot more to be concerned with on the business travel customer but outside of the very near term, it seems that the leisure travel is still in fine shape. 

There’s some reluctance among travelers to pull the trigger on bookings right now (we’re seeing that in other data), but the immediate to longer term outlook on leisure travel remains robust. 

Longwoods International’s latest Covid-19 travel survey update (through 9/1) suggests that US consumers are prioritizing leisure travel and their collective confidence in booking travel over the next 6-mths has not wavered. 

Data points like this and other 3rd party data suggest that conversion rates on bookings should inflect higher as consumers gain more confidence in the path of Covid.  Despite the last 45 days of constant headlines and bad Covid data, it’s very encouraging to see leisure travel sentiment recover to YTD highs – effectively a mirror image vs business travel. 

OTAs should be prime beneficiaries of this sentiment resilience.  

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