Below is a complimentary research note 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 email@example.com
Welcome to another installment of the Hedgeye Consumer Travel Demand Survey.
With the country muddling along in its reopening process and in some cases facing rollbacks, significant improvement in underlying travel trends is difficult to discern from the many datasets we track.
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 have spent the last month fighting against a Covid-19 resurgence which appears to be marginally impacting travel sentiment. Still, there has been evidence of slight improvement in some areas.
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 has been resilient.
Consumers continue to be more partial towards hotels & resorts, although the last few weeks suggest that vacation rentals and alternative accommodation could be gaining some steam among those looking to book some sort of vacation. Intent for cruising remains well below its highs and is flailing – not a good sign for new to cruise customers.
After 20 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 – a sign of the times…
Methodology of Survey
Every other week, Hedgeye Gaming, Lodging, Leisure (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
Survey results for hotels and resorts took a step back in the most recent installment, yet another datapoint suggesting consumers just aren’t convinced that travel is how they intend spend their money right now.
- The % of neutral responses dropped back down vs two weeks ago, while the “unlikely” buckets saw a simultaneous uptick – not a positive for the recovery.
Net/net, the survey spread between “likely” and “unlikely” for hotels & resorts fell back to the lows seen in mid May. We care less about the levels and more about the RoC and this latest reading is more RoC negative vs the prior 2 and 4 weeks.
“Likely” buckets were up nicely on the week, the highest they have been since June. Note, vacation rentals never really experienced much of a spike since our survey started, perhaps due to vacation rentals being less prevalent among US travelers. In fact, other alternative datasets that we track seem to suggest that vacation rental bookings are recovering faster than they are for hotels & resorts.
Net/net, the spread between “unlikely” responses and “likely” showed additional improvement in this recent update, on par with our update 8 weeks ago.
- These results are a positive, and certainly a relative positive, for the Alternative Accommodation (AA) segment. Note, EXPE remains the only stock on our Best Idea Long List due in part to its exposure to and growing market share in AA.
Cruise lines continue to materially lag land-based alternatives and the most recent datapoint was no exception – limited improvement since mid-April is what we are seeing.
The % of neutral responses did tick down this past week, but more of the prior week’s indifference was spread into the “unlikely” buckets than the “likely” buckets, so the tradeoff is negative.
Net/net, the survey for Ocean Cruise skews marginally more negative than it did 2, 4, and 6 weeks ago, but not significantly worse than what we saw 8 weeks ago.