Are you going anywhere this summer? According to Hopper's research, more than 86% of Americans plan to travel this summer. With inflation still permeating most sectors and impacting consumer prices, will there be a change in the way Americans book vacations and travel this summer?
Priceline CEO Brett Keller joins Catalyst to provide insight into the busy travel season and key areas of consumer travel spending, including airfare. Priceline.com is a subsidiary of Booking Holdings (BKNG).
Asked about the current interest rate environment impacting consumer spending, Keller said, “Travel has historically been a very high priority part of the consumer budget. “This trend continues even as people have given up on household items and other hard goods.” While their travel still appears to be healthy, it's likely that suppliers will actually start lowering their prices going forward, which will open up more travel opportunities and deals for consumers. ”
For more expert insights and the latest market trends, click here to watch the full episode of Catalyst.
This post was written by Nicholas Jacobino
video transcript
Summer is here.
More than 86% of Americans plan to travel this season, but price inflation continues, according to a new survey.
So we're seeing a change in the way people travel, whether it's choosing to go all-inclusive and vacationing nearby, or vacationing holistically because of what Brett Keller is trying to introduce.
He's Brett, CEO of Priceline. Thank you very much for joining us.
Now I want to jump to the big picture of inflation. Because that's what we're interested in here at Yahoo Finance.
What tells you where consumers are headed regarding inflation?
So far, global leisure travel demand has been very strong.
In fact, it's booming in Asia.
Although Europe has lagged behind the other two countries, it is still performing well, with good performance in the United States.
In fact, as we look forward to Memorial Day travel, we expect near-record numbers of travelers to hit the roads and likely record numbers to move through airports.
So far, I think consumer demand has held up, largely because ticket prices are actually down 15% year-over-year.
And it's really helping. I think the airlines have opened up more capacity as a result to increase airline traffic.
Is Brett a traveler looking for more deals on the activities shown on your site?
story continues
And maybe, eventually, we'll wait to book until a little later, hoping the prices will come down?
Well, the shopping pattern is higher.
As a result, more people are shopping and making reservations in advance of their actual reservation, but no one is waiting until the last minute to make a reservation.
People are making reservations in advance.
In fact, reservation slots are gradually increasing. This means people are becoming a little more comfortable booking in advance and planning their trips a little more carefully.
Even though there are a lot of shopping activities, I still plan them.
Well, hotel prices haven't fallen as much as airline ticket prices have.
There's a little more pressure on the hotel side.
Yeah, it was an interesting story about the pressures that we're feeling on the hotel side and how much we feel that correlates to what we're seeing from airbnb from a user perspective.
I'm starting to get a little curious about the hidden fees and booking experience offered through their platform.
of course.
Well, 2023 was a very big year of travel.
As you know, this was the first year that there were no restrictions all year long, and people had a lot of extra cash.
And they really travel avidly and used a lot of different booking methods to get trips and deals this year.
Here in the U.S., we're moving toward a more typical standard travel pattern with mid-summer peaks, Memorial Day, and nice travel periods in between where consumers can find better deals.
And I think what's really happening is that people are getting into a more normal travel state and trying a little bit more to really find something that fits their budget.
Listen to the story of the hotel industry. Capacity continues to be added at a very slow and steady pace of about 1% per quarter.
Therefore, there are not many new opportunities for hotels.
So hotels were able to keep prices high.
While airlines are adding capacity at a significant rate, as you know, United Airlines announced in its first quarter results that it increased capacity by 9%, which is a significant increase in capacity for the airline industry. This means that we have added supply capacity.
But when it comes to the fact that interest rates are still high inflationary pressures, or if we don't see some rate cuts, inflation is still very sticky.
If inflation doesn't improve any further between now and the end of the year, will we see further deterioration?
I mean, how do you look at that?
What is the possibility?
Well, it's obviously difficult to predict what will happen with consumer travel.
Listen, travel has historically been a huge priority in consumer budgets.
And we continue to see that even though people are pulling back on some household items and other hard goods right now, travel still appears to be healthy and moving forward.
Well, what happens is that suppliers start lowering their prices, which opens up more travel opportunities and opens up more deals for consumers, where the same type of travel costs less. think.
And I think we're seeing a little bit of that in the United States today and in some periods where some of the big hotel chains have had to discount prices a little bit to stimulate demand. . The demand is still there, and we're seeing very strong demand, especially during peak periods.
Now, I would like to change my mind a little.
We believe you have your own AI-powered travel assistant, Penny.
But I'm curious about Penny's competition. Because I already use Chat GP T throughout most of my work day. So here's the potential for you, and people are already joining platforms for things like Chat GP T. Just let the platform find you cheap travel deals and book your flight directly from the airline.
Well, listen, Chad GP D is a great place to go.
Whether you have general travel questions or are looking for very specific questions, like what you're actually booking as you progress through your Priceline trading experience, ask very directly. can. When we get out of our flow, we find answers we don't find.
We will notify you of the availability and price of specific hotels and flights in real time.
Meanwhile, other bots and engines outside the travel ecosystem cannot access that information.
In fact, we have many unique prices and inventories that only our very own Uh Travel Bot Penny can access.
Okay, Brett Kellow, CEO of Priceline.
Thank you so much for taking the time to join us this morning.
Thank you very much.
surely.
thank you.
