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1. Fed Still Concerned About Inflation
U.S. Federal Reserve officials are concerned inflation could make a comeback, leading many to believe that any relief on interest rate increases could be short-lived, The Wall Street Journal reports.
"Some Fed policymakers and economists are concerned that the easing in inflation will be temporary," the newspaper reports. "They see inflation’s slowdown as long overdue after the fading of pandemic-related shocks that pushed up rents and the prices of transportation and cars. And they worry underlying price pressures could persist, requiring the Fed to lift rates higher and hold them there for longer."
Inflation hit its lowest rate in two years in June, down to 3% year over year, compared to 9.1% seen in June 2022.
2. Tourists Flee Wildfires in Greece
More than 32,000 residents and tourists have fled from two Greek islands that have been hit by "wildfires fueled by high winds and an unrelenting pattern of brutal heat waves," USA Today reports. The fires come during peak travel season for the islands of Rhodes and Corfu.
"Tourists were being crowded into emergency shelters in schools, airports and sports facilities," the newspaper reports. "Many of the tourists are British, and Jet2 was among U.K. airlines organizing repatriation flights to get them home."
3. International Travel Buoys Earnings Outlook
Hotel industry companies set to announce second-quarter earnings starting this week are expected to pin optimism to a boost from international travel, HNN's Trevor Simpson reports. Wall Street analysts said the outlook now is more positive for brands than real estate investment trusts, which face slowing revenue growth and increasing cost pressures.
“It’s a real mixed bag right now,” said C. Patrick Scholes, managing director of lodging and leisure equity research at Truist. “That’s going to depend on geographic strengths and weaknesses, depending on geographic location and customer mix.”
4. Europe Dominates Travel Plans
Reuters reports European travel is likely a boon to the broader travel industry as travelers see destinations on the content as a relative bargain.
Demand for hotels, resorts and cruise lines could jump 407% for the second quarter compared to the same period a year prior, according to Refinitiv. And demand has been more resilient than expected.
"Travel is acting very un-discretionary," Barclays analyst Brandt Montour said.
5. Corporate Travel Spending Increases
American Express corporate customers have spent 8% more year over year on travel and entertainment, totaling $27 billion in the second quarter, Business Travel News reports.
During the company's most recent earnings call, chairman and CEO Stephen Squeri said there is still more room for corporate travel growth.
"What you're seeing a little bit less of is those one-stop trips, that quick hop to London to meet with one client or that quick sort of run across the country to have an internal meeting," Squeri said. "I think that will continue to come back. We continue to be aggressive at retaining those customers and aggressive acquiring new customers, but I think that's going to be slower."