Over the last several weeks, many travel businesses released their Q2 earnings and shared their latest expectations. These insights and perspectives help us understand how some of the largest corporate travel players are viewing the state of the economy and its impact on the travel industry as well opportunities or barriers on the horizon that may impact their continued growth. Here is a deeper dive into their perspectives.

Leisure demand normalizing and returning to pre-pandemic trends

Hilton CEO, Chris Nassetta: Leisure demand in the U.S. remained strong but grew more modestly year-over-year due to tougher comparisons. We're having a wildly strong summer in leisure. The only places where leisure has backed off a bit is where you would expect it, where it's normalizing from crazy highs.

Delta Air Lines CEO, Ed Bastian: The industry backdrop remains constructive. We see strong domestic and international demand. Air travel demand is strong and the consumer is in good financial shape, particularly the premium consumer base. After years of spending on goods, consumers want to travel. It's their No.1 big-ticket purchase priority, and they desire premium experiences.

At the same time, aviation infrastructure is still fragile, and the industry continues to face multiple constraints across the supply chain, aircraft delivery delays and training needs. As a result, we see a significant gap between the supply that is in place and what demand could sustain, and we expect this gap will remain for an extended period of time.

Southwest Airlines CEO, Bob Jordan: [We plan to] make a series of schedule adjustments designed to align our network with post-pandemic travel patterns that lean more heavily on leisure travel than pre-2020. We are revamping our 2024 flight schedules. While our network is largely restored at this point, it is not optimized, especially for post-pandemic shifts in business travel. I expect [corporate travel] to continue to come back, but I think it is going to trail restoration of leisure for a while. Reduced frequencies on short business-travel routes, placing the freed-up aircraft on more leisure-oriented medium and long-haul routes.

Avis Budget Group CEO, Joe Ferraro: Our strong second quarter results continued to showcase the earnings power of our company. Summer travel has continued to be robust with elevated peak period demand and seasonally improved pricing. Our teams remain focused and ready as we transition into our busiest season of the year.

American Express Chairman and CEO, Steve Squeri: Travel bookings more than one month out are higher than pre-pandemic…higher than they were at this time last year….and 2019. International is really coming back strong. [There was] a little hangover of noise from omicron in this quarter because last year, you had a bit of spending pushed from the first quarter to the second quarter. If you go back and look sequentially last year, it was a huge increase sequentially quarter over quarter.

Many pre-pandemic trends and returning including some seasonality and capacity shifts, which allow organizations to better able to predict and plan upcoming demand, a welcome reprieve from the tumultuous past few years.

Delta Air Lines CEO, Ed Bastian: We're now at a much more normalized level of stability in the fare environment, particularly domestically. Capacity constraints and strong demand drove fares higher last year but we’re in a normalized environment today and Delta’s pricing is still holding up. As capacity trends down, as we head out of restoration into a more normal growth cycle, I think you'll see a pretty even distribution between domestic and international as we head into '24… and more normal seasonality.

Wyndham CEO, Geoff Ballotti: U.S. RevPAR is normalizing against the record comps we saw last year, yet growth versus pre-COVID levels has remained strong. Fundamentals remain strong and select service brands continue to outpace their full-service counterparts across the industry. Recent economic data continues to build our confidence for future demand and booking trends.

Avis Budget Group CEO, Joe Ferraro: It appeared the industry has returned to normal seasonal trends. In general, trends for the quarter were what we had seen pre-COVID and show that we are no longer in a COVID environment as it pertains to the business dynamics and seasonality. Overall, demand for travel is robust, and we believe the summer of 2023 will be one for the record books.

American Express Chairman and CEO, Steve Squeri: What gives us confidence is looking at what has actually happened in our business over the course of this year. In the first quarter, you were clearly lapping omicron, the last of the pandemic-driven noise. As you got into the second quarter, we have seen stabilization across geographies at a level that would suggest and is actually consistent with a pretty low-growth economy.

Marriott CEO, Anthony Capuano: Global leisure demand and ADR remain robust. Leisure revenue rose 1% above last year’s sensational second quarter [in the U.S.]. Demand has been stabilizing on a year‐over‐year basis, with travelers from the region increasingly taking vacations overseas now that pandemic‐related travel restrictions are behind us.  

Avis Budget CEO, Joe Ferraro: Last year, we saw demand materialize in locations that supported beach, mountains or areas of high outdoor activities. And while this was still true this year, there is more robust return to cities, and as this continues into the summer, it allows utilization to be more evenly distributed.

International demand, particularly for the premium leisure customers, appears to have the greatest tailwinds as air capacity is restored and Asia Pacific region continues to recover.

Marriott CEO, Anthony Capuano: We continue to see continued recovery on cross‐border travel, which gives us another layer of optimism. Prior to the pandemic, international visitors accounted for nearly one‐quarter of room nights in Greater China. With the region’s international airlift still only around 40% of 2019 capacity at the end of the second quarter, we believe there is still meaningful growth opportunity in and from Greater China.  

Delta Air Lines CEO, Ed Bastian: International travel and demand for premium seats like first class were standouts during the second quarter. Trans-Atlantic travel was particularly strong in the spring and early summer, with revenue from those trips up more than 60% from a year ago, compared with an 8% increase in domestic revenue and 21% rise in passenger revenue overall.

Avis Budget CEO, Joe Ferraro: International inbound is a segment where we're seeing strength similar to what other travel companies are reporting, but it's not large enough segment to overcome the headwinds we're seeing in the core European travel. Domestic and cross-border travel, which make up over 80% of the rental base is still down over 30% versus 2019. For this reason, we still believe that there's continued opportunity for operating leverage in this region. The return of days is just taking longer than we've seen in the Americas.

American Express Chairman and CEO, Steve Squeri: Of particular note, our international card business was our fastest-growing segment for several years prior to the pandemic, and it's again the fastest-growing. We continue to see strong growth in travel and entertainment spending, which increased by double digits in the quarter and remained strong across customer categories and geographies.

United Airlines CEO, Scott Kirby: Q3 capacity deployment focuses on international markets with capacity expected to be up 23% versus 13% for domestic. We believe international revenue will continue to outperform domestic revenue in the third quarter across the globe other than Latin America.

Overall, our domestic margins are now back at 2019 levels while our international margins are trending well above where they were in '19. Asia is going gangbusters, and we’re really happy with where it’s at. We’re leaning into global long-haul environment because that’s where we think the revenue is right now.

Marriott CEO, Anthony Capuano: The reality is that the recovery in China has come faster than we expected. And cross‐border is still meaningfully lower in China than it was pre‐COVID, international airlift is only at 40% of pre‐COVID level. And as the rest of Asia Pacific has opened its borders completely, we've seen that all of the travel there has picked up very fast.

And Europe this summer has dramatically outperformed expectations. International travel is benefiting from cross‐border travel. And frankly, [the] global economy has probably been a bit stronger than everyone anticipated at the beginning of the year.

While macro conditions are slowing, companies are optimistic about the continued growth of business travel as more corporations return to the office and invest in new hire training. Transient business travel has the most room for growth and is steadily, albeit slowly, improving.

Delta Air Lines CEO, Ed Bastian: Business travel in the quarter improved year-over-year, primarily driven by international. On corporate, we expect steady improvement in demand. Our recent corporate survey shows businesses expect to increase travel in the second half, with several of the least recovered sectors conveying optimism for increased travel in the fall.

…your propensity to travel is directly related to whether or not you're in the office. And as we see more and more offices trying to reopen or reopening and corporations are trying to get people back in the office, I think that's a great constructive backdrop for us as we head into the fall.

Avis Budget CEO, Joe Ferraro: We have a lot of commercial business that has been coming in. People, commercial companies are getting back to travel. We've seen outsized demand in aerospace and defense, professional and financial service companies, tech.

Southwest CEO, Bob Jordan: Second quarter revenue from corporate travel came in largely as expected, as we realized improvement in managed business revenue. While travelers from some of our largest segments have reduced their frequency of their business trips from pre-pandemic levels, we're pleased with the gains we continue to make in the managed business space. Small and medium businesses, government and educators are strong points for us…We gained additional passenger market share in the second quarter and exited the quarter seeing more unique travelers flying for business than we saw pre-pandemic. Overall, however, we expect corporate travel demand will remain lower than leisure for the foreseeable future, particularly compared with pre-pandemic.

American Express Chairman and CEO, Steve Squeri: Small business and corporate are crawling their way back. It's an important piece of our business. The first step is to get people into the office and the second step is to get them out onto the road. The biggest thing there from a small business perspective is the organic growth...which has slowed [after growing rapidly]. But there are cycles, and at this particular point in time [we are seeing a] little bit of an industrywide slowdown from a small business perspective.

Jet Blue CEO, Robin Hayes: Historically, leisure markets have ramped up more quickly, and we know that there is a demand that can't be satisfied. So, the question is in terms of some of the off-peak capacity…where corporate travel is 20% down, how do airlines meet that off-peak need? ...it's resourcing strategy and maintenance planning.

Wyndham CEO, Geoff Ballotti: [There are] 1.8 million companies contracting accommodations for infrastructure workers and are seeking economy average daily rates with average length of stay approaching 30+ nights versus that midscale and above average daily rate. It is a very large and underpenetrated segment. And we think there's plenty of space for continued room growth there.

Marriott CEO, Anthony Capuano: The group segment had another great quarter. Group revenues are expected to remain strong going forward.  Meeting planners are beginning to book further out, a trend we’re also seeing with transient customers. Recovery in business transient demand remains slow but steady, with demand from top corporate accounts progressing modestly in the quarter.  

And we continue to see real legs to this blended trip phenomenon, we think that's going to continue to drive occupancy, particularly in the days of the week that historically we considered shoulder days

Marriott CEO, Anthony Capuano: SMEs represent about 60% of our business transient segment and were fully recovered a quarter ago. Their demand continues to be quite robust. Large corporate room nights continue to recover a bit more slowly. What we hear anecdotally [is that they] continue to meet a great deal as they hire new staff, as they immerse them in their culture and do training meetings. We think that's one of the drivers of the strength we're seeing in the group segment.

Hilton CEO, Chris Nassetta: On the group side, we continue to see very positive trends. [Businesses are] feeling quite good, particularly the SMBs. They're traveling more and feeling reasonably good about soft landing. [There continues to be] pent-up group demand. Many large association groups are booking, but that's multiyear booking cycles, that's still to come. We don't see weakness.

As demand normalizes somewhat, multiple organizations highlighted their investments in technology, customer management tools and sustainability in an effort to maximize revenue, reduce costs and improve the customer experience in the long term.

Delta Air Lines CEO, Ed Bastian: We consider [digital footprint and technology investments] one of the most important activities and investments we are making in the company. On the one hand, we're far along. We've been working on this for a while. But clearly, we have a lot to do as well.

Hertz CEO, Stephen Scherr: We are investing in the largest EV rental fleet in North America and one of the largest in the world. These are early days in a transition that hasn't happened in the automotive industry in a century. We are preparing ourselves for an electric future and are pleased with our progress on this strategy.

We are in an evolution of readiness and smart investments that are not easy to replicate quickly. We are creating value through our investments in technology. Customers want more seamless experiences, and we are leveraging leading edge technology and partners with industry leaders to deliver.

Sea World CEO, Marc Swanson: On the digital transformation front, we continue to build out our CRM capabilities…to ultimately have more rich data about past members and guests and more effectively engage, analyze behavior and tailor and target messages and offerings.

We are pleased [the mobile app] is being used by an increasing number of guests in our parks to improve their in-park experience. Mobile ordering has been expanded to additional restaurants and is now operating at approximately 75% of our target restaurants. We are excited about the potential of the app and its ability to improve the in-park guest experience drive increases in revenue and decreases in cost.

United Airlines CEO, Scott Kirby: United Airlines announced new mobile app features that support customers during travel disruptions. These first-of-their-kind tools will allow customers to rebook, track their bags and get meal and hotel vouchers when eligible on their personal device. It is important for us to provide customers with the resources they need for their flight at their fingertips, especially when things don't go as planned.

Marriott CEO, Anthony Capuano: We are increasingly leveraging technology to enhance the guest experience to drive profitability for our owners and simplify processes for our associates. We are in the process of a major global transformation of our digital and core technology and will be launching new reservations, loyalty and property management platforms over the next several years and look forward to the numerous capabilities these new systems will offer our key constituents.

We continue to look for opportunities to leverage evolving technologies like AI to remove friction for our guests, to create capacity for our associates. But we do it in a way that is mindful of how rapidly the technology is evolving and mindful of some of the real important considerations around facets of evolving technology like privacy. The reality is that at the end of the day we believe that it is the person‐to‐person and the experiential part of our business that makes it so unique. So being able to use generative AI in a way that enhances that service, we see it as a real benefit, but never to take away from the fundamental people‐to‐people part of our business.

Despite an economic slowdown looming, travel organizations are optimistic travel demand will remain strong for the coming year and the industry will see a full return of business and international in the near future.

Delta Air Lines CEO, Ed Bastian expects consumers’ desire for travel will fuel bookings for years, calling the current period the “mid-innings” of travel growth. I think the trends that we’ve seen this year are going to continue. International demand remains robust into the fall and Delta expects a slow but steady increase in corporate travel bookings.

Avis Budget CEO, Joe Ferraro: In a word, things are looking positive. The demand for travel is strong. The summer season has always been a time of the year when activities are at their highest level. This year, the peak seems to be larger and more elevated. Bookings are happening closer in, which is what we've seen traditionally as customers are confident in both longer term and closer in travel opportunities.

Pricing in the third quarter will improve sequentially from the second quarter and be more aligned with traditional seasonality. We have enough visibility to project that despite some reallocation of demand towards international travel, our Americas segment will deliver the most rental days in the company's history this coming quarter.

Hertz CEO, Stephen Scherr: In all, travel held up in the quarter and has continued to demonstrate strength early into Q3. We look to benefit from a continuing tailwind in U.S. inbound travel and further recovery in business travel. Risk of economic slowdown notwithstanding, we expect to benefit from a supportive business environment for the balance of Q3. Travel trends are prevailing over the risks of an economic slowdown. Until that equation changes, we will continue to benefit from the former, and we'll be ready for the latter.

United Airlines CEO, Scott Kirby: There’s clearly been some shift out of Q3 into Q4. October is setting up to be a stronger month of the year than it was in 2019. But we do know about some of the headwinds and tailwinds that we’re going to see as we start putting together the plan on the cost side. Headwinds would include the full year impact of the labor contracts and contractual increases. Inflation [and infrastructure] constraints on growth. Tailwinds include improved utilization, improved productivity as our junior workforce begins to gain some experience.

Hilton CEO, Chris Nassetta: As we look to the back half of the year, we expect continued strength driven by recovery in international markets, business transient and group demand. We have reasonable sightlines now into the third quarter. And as we look at the fourth quarter, macro conditions may slow.

Marriott CEO, Anthony Capuano: While there is still a level of macro‐economic uncertainty, as we look into the third quarter, the consumer is generally holding up well and our forward bookings remain solid.  It seems more likely that the U.S. economy could have a soft landing and relatively steady global economic conditions throughout the remainder of 2023, with continued resilience of travel demand. Growth is expected to remain higher internationally than in the U.S. and Canada, where we are seeing a return to more normal seasonal patterns and RevPAR growth is stabilizing.   


In This The Itinerary
U.S. Travel Association is the national, non-profit organization representing all components of the U.S. travel industry—a key contributor to America’s economic success. Our mission is to increase travel to and within the United States, and in doing... View Profile ›

U.S. Travel Association

For more information about this blog, please contact us at: