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Below is a complimentary research note on 7/6 from our Gaming, Lodging, and Leisure (GLL) analysts Todd Jordan and Sean Jenkins. If you are an institutional investor interested in accessing our research email sales@hedgeye.com |
HEDGEYE EDGE
Welcome to another installment of our very own Hedgeye Consumer Travel Demand Survey. With the country well into its reopening process, and even starting a reclosing process in some states, we have seen some positive momentum in travel data, but are now faced with the more difficult part of the recovery.
How does the domestic travel recovery sustain itself through the macro downside that is still to come and how does it manage through the lingering Covid-19 risks? Many states are starting to roll back reopening policies which could be having a marginal impact on travel sentiment, but still, there has been evidence of improvement across the board for many travel datapoints.
As for our survey, it has failed to capture a consistent level of optimism for the domestic traveler, but we do see clear evidence that the leisure traveler is fairly resilient. Consumers continue to be more partial towards hotels & resorts, but judging by overall travel intent, it’s not a done deal that hotels will recover any quicker than vacation rentals, at least on the leisure side.
After our first 14 weeks of running the survey, we would have expected a more positive direction from the data, but interestingly, we continue to see plenty of indecision among the average person. We will provide another 2 installments of the survey, though we will be running the survey in bi-weekly runs.
consumer survey results
Methodology of Survey
Each week (now every other week), Hedgeye GLL will receive updated results from their consumer survey questions. Since the majority of GLL is centered around the theme of “travel,” we geared our survey to directly plug into the wants and desires of potential travelers on a 6-month forward basis. Our survey is strictly focused on the US consumer and aims to gauge changes in interest levels across time.
Latest Results Commentary
Hotels & Resorts
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Another below average week in the “likely” buckets for hotels & resorts and the weakest reading in over 6 weeks, actually. That said, the survey hasn’t breached its prior lows (positive) but continues to back off its highs (negative).
- The % of neutral responses ticked up vs two weeks ago, suggesting slightly more indecision is building vs outright negativity.
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Net/net, the survey spread between “likely” and “unlikely” for hotels & resorts were slightly more positive than two weeks ago, but it’s still hovering around the lows of the survey time series. We care less about the levels and more about the RoC (as does the market), and this latest reading is more RoC neutral vs negative or positive.
Vacation Rental
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“Likely” buckets were up on the week, but not totally different than recent trends. Note, vacation rentals never really saw much of a spike since our survey started. Perhaps due to vacation rentals being less prevalent among US travelers.
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Net/net, the spread between “unlikely” responses and “likely” showed marked improvement in this recent update, on par with our update 4 weeks ago.
Ocean Cruise
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Cruise lines continue to lag land based alternatives and the most recent datapoint was no exception – limited improvement since mid-April is what we’re seeing.
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The % of neutral responses were flat this past week, so the unlikely buckets continue to be elevated.
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Net/net, the survey for Ocean Cruise skews marginally more negative than it did 4 weeks ago, but not significantly worse than what we saw 6 weeks ago.
If you are an institutional investor interested in accessing our research email sales@hedgeye.com
