Holiday Travel Outlook

same day last year. Again, according to the t s A, still the one day tally fell about eleven shy had the same figure back in when two point eight eight million travelers were screened. But bottom line, like there's a lot going on. People are traveling absolutely still seems like a lot of pent up demand. You know, people who canceled vacations and visits to their family during the pandemic really trying to still get them in now. So uh, I don't know, it's uh good time to travel, I guess.

All right, Well, let's see what our next guest has to say about that Price Line CEO Brick Keller joining us to be a zoom from Norwalk, Connecticut. Price Line, of course, a subsidiary of the publicly held booking holdings Brett Good to have you here Bloomberg Business Week. Tell us about the activity that you guys are seeing. Have you been traveling a lot lately? Yes, I have. Actually, I just got back late last night from a trip

out west. The plane was completely packed, you know, a little bit of a delay coming into New York, but overall, you know, the Thanksgiving period of travel across the country was very smooth, you know, Brett, Obviously, inflation has been the hot topic all year. I'm wondering what you're seeing as far as prices in the travel, hotel, airfare, that sort of thing. Are they rising as much as you know cp I would suggest something like seven Actually a

little hotter than that. Um depends on, you know, whether you're booking a flight or book in a hotel, but they're both up. On the hotel side, you know, prices up seven eight percent versus where they were a year ago today, so a little less in the CPI, But when you look at flies and they're closer to fifteen, especially if you're flying overseas. So with the cost of jet fuel, you know, really up fifty percent where it

was a year ago. That's pushing prices higher along labor costs and consumers seem to be shaking off those higher prices. They continue to prioritize travel over other purchases and are really hitting the roads. So here at Priceline, you know, we're really seeing good, healthy travel demand. October actually accelerated from where it was in August and September. As we look into next year, patterns seem to be holding up

at least so far. So are we back at levels based on what you're seeing off your platform, Brett, Yeah, we're very close. On the hotel front. If you just look at industry data broadly, for for the hotel category, you know, their occupancy rates are just about where they were in two thousand nineteen, maybe a percentage point below, but very healthy on the flight side, even higher in the nineties in terms of you know, seat capacity utilization. So things look pretty good in the industry right now.

And you know, consumers no longer have any COVID concerns, especially here in domestic travel in the US, and we're seeing a really strong demand into Europe and now starting into Asia as they've lifted restrictions there. Let me just just to follow on that. So I am always curious, Brett on a platform like yours, I mean, how much visibility do you have looking out Is it a couple of months, is it's six months, is it twelve months?

What kind of visibility do you have in terms of what the environment might be for travel heading into sure, well, the average booking window for a consumer booking you know, out into the future is usually pretty close in two three to four weeks. That's really where most of the bookings happen. But we do see, you know, well into the future people will book out to three and four months for certain types of vacations, and so that's a good proxy for what we're seeing. And so far that

data looks pretty good. Things are still relatively healthy as we look into the future into first quarter of next year, so you know, demand again appears to be holding up um and we'll we'll see where it goes from there. But so far, we're we're happy with how things are playing out in the travel space. Yeah, Brett, I think probably a lot of listeners hit your site looking for a deal of course, you know, or any tips on how to save a few bucks in this holiday season,

considering prices of everything are higher. There any sort of tricks of the trade you could share with us. Yeah, absolutely, listen. This is why price Line was founded, you know twenty five years ago, was to help consumers navigate a very

complex space and and find savings. So when when you think about ways to save money today and this really high price environment, one is you really need to avoid these high peak travel dates if your schedule allows, and more and more consumers are able to do that now. So for example, with the upcoming holidays, try your best not to fly on the twenty three and right right before and right after a Christmas holiday or the day after New Year's Day. Really try and push that out

a couple of days. You can save fifteen because they really optimally price for those dates at From the airline side, a second way is on a site like price Line, you can book with mixed carriers. You can fly out on one airline fly back on another that can typically deliver you anywhere from five decent percent off of what you would pay if you flew out and back on the same carrier. So by mixing and matching carriers you can save money. And a third is to package right

and bundle your your your bookings together. So if you're going to book a hotel and a flight, bundle those together, you will save money because we have access to especially negotiated rays that can only be used in that bundled experience, and that does deliver real value up to you know, a couple of hundred dollars a trip when you really are thoughtful about destinations and how you book those together.

You guys do have lots of data you can see in real time, like what's interesting to people, what are the most popular flights that people are booking right now? Well, uh, you know, coming out of consumers really stay close to home and many of them were not really even leaving the country. Uh. And so we've seen big markets really start to open up this year, especially for Christmas and New Year's So New York, Atlanta, Las Vegas, l A

all very very top of the charts right now. Also Orlando. Uh. That's always been a number one or number two market for US in particular, but really for the country, and

it continues to be a top market for consumers. But what we're seeing a lot more the second half is people are leaving the US to travel overseas, and when you look at where they're going in Europe, obviously London is a big market, but they're also heading into many other interesting destinations there and a few now moving into Asia. But really for the holiday period, warm destinations are at

the top of the list. Locations like Cancoon, Jamaica, Dominican Republic are very very appealing to consumers just looking to get a break and get some sunshine. A colleague of ours here uh said, yep, we just came back from Jamaica, and I have to say our producer Paul Brennan actually over in Madrid with his family spending Thanksgiving there, and so yeah, people Mike are out and about and they're

getting out of the US. Take any of those destinations. Yes, yes, and yes, hot sand a golf course, swimming pool, one of those drinks with the umbrella. But Brett, you know, it's such an unusual economic environment that we're in right now. We have high inflation but super low unemployment. Everyone's worried about a recession. I'm wondering which of those variables matter the most to your business. You know, is it unemployment,

is it g d P? Is it inflation? Is you know my guess is unemployment is is probably that the main thing that would sort of be a headwind to travel is that a fair assumption. Yeah, I think that's a fair assumption. I've been in the industry for over twenty five years. You know, we went through this back in oh eight, and travel is a very resilient category.

People seem to prioritize that they always want to have that opportunity to visit family, to take a break, and so, you know, if you're unemployed, obviously that makes it very, very challenging to pull together the dollars that's required to tip to take a trip like this. But what people will typically do if they're constrained is they'll start to modify how they travel. They may drive instead of fly,

they may you know, drop down a star category. Um, they'll find ways to save money but still take that trip. And we're not necessarily seeing that trade down happen yet, but certainly that's what consumers may end up doing if they're really pressed for cash. Brett. We spend I feel like every day in and out here at Bloomberg, because of the upcoming FED meeting, because of the FED conversations,

because of j Pal speaking this week. We talk about, you know, the prospect of a recession, whether it will be shallow, whether it will be deep, whether the FED will overdo it. What's the conversation's constructive conversations you guys are having at priceline Um when it comes to the economic outlook and the possibility of a recession. Sure, well, that's obviously on everyone's mind here as well as we read the news and everything that's going on in the

in the category. What's interesting though, is so far, the hotel chains, the major airlines, they are all signaling good, strong, healthy demand for their product. And a lot of that obviously is because of consumers not being able to travel for really a good year and a half, and so that's propelling travel forward. And you know, when you think about what consumers are looking to do with whatever extra cash they have, they are prioritizing this now over really commodities.

So you know, as we think about a recession, we're thinking, yeah, this could be, this could be obviously harmful to the industry longer term, but we just don't see that. And historically when you look back to Ohay, it weathered that very very well as well. So we're very optimistic about the next couple of years, even in the face of what could be, you know, a recession. But you know,

you can't predict the future anymore. It's it's becoming a bit a bit too challenging, you know, Brett Quickly, I was looking at some of the notes that you sent us before the show, Um and Cruises. The price you gave, the low price for a cruise ship per night made my eyes pop out. Is that a type of seventy dollars a night you can you can go on a

cruise work. No, that's absolutely an accurate figure. In fact, you know that's one of and most people don't know this, it is one of the most cost effective vacations there are because it typically includes obviously food and beverage as well, so you bring that together. It's a it's a really nice vacation. Now you have to get yourself to a cruise port, but there are ways to either drive there or find a cheap flight to get you there too,

then get you onto that cruise line. And now you know, the cruise lines obviously had a tough time through COVID and continue to have a lot of excess capacity, more so than many of the other travel categories. So they're really they're really rolling out the credits and other things to get you onto those ships. Yeah, I just talked with the CEO and CFO of Royal Caribbean for an upcoming Bloomberg television broadcasting. They seem pretty optimistic about the outlook.

They're pretty busy, all right, Brett Keller, thank you so much, CEO at price Line, joining us via zoom in Connecticut