Airlines Warn of Slowdown—Should OTAs Brace for Impact Too?

Major U.S. airlines including Delta, American, Southwest, and United have recently lowered earnings forecasts, citing a challenging economy and rising global trade tensions. At the same time, consumer confidence has seen its sharpest decline since August 2021, according to The Conference Board, signaling potential trouble for travel demand.

A report by Tourism Economics projects U.S. inbound visits could decline 5.1% in 2025, with international spending down 10.9%, resulting in an estimated $18 billion loss. Factors include trade policies, declining European sentiment, and geopolitical uncertainty, particularly surrounding U.S. relations with Canada, Mexico, China, and Russia.

Several nations, including the U.K., Canada, and Germany, have issued travel warnings for the U.S., while airlines cancel international routes amid shifting demand. TD Cowen analysts warn the situation could affect long-haul markets, noting early signs in the U.S.-Canada transborder corridor.

These developments raise concerns for online travel agencies (OTAs) like Expedia, Booking Holdings, and Airbnb. Lorraine Sileo of Phocuswright says weakening consumer confidence and changing travel behavior are real risks, especially for U.S.-focused platforms. However, BTIG’s Jake Fuller notes OTAs have yet to show signs of softening demand and may be better positioned to protect margins due to flexible marketing budgets.

While macroeconomic pressures mount, experts say the impact on OTAs remains uncertain. Easing trade tensions or positive airline earnings guidance could help stabilize sentiment. For now, industry analysts agree the situation is fluid, but Americans’ strong appetite for travel may continue to support bookings despite growing economic headwinds.

Tags: phocuswire

Airlines Warn of Slowdown—Should OTAs Brace for Impact Too?

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