Travel stocks tumble as airlines warn of slowing demand

Expedia, Airbnb, and cruise operators hit hard amid economic uncertainty and airline forecast cuts

Tourism-related stocks suffered a major drop on March 11 after several U.S. airlines issued warnings about declining travel demand, raising concerns about the broader economy. Expedia Group saw an 8% drop, making it one of the worst performers in the S&P 500, while Airbnb also faced a steep decline.

Key takeaways

• Airline profit warnings: Delta, American, and Southwest Airlines lowered their Q1 2025 forecasts, citing economic uncertainty and weather disruptions;
• Broad market impact: The warnings triggered a selloff across the travel sector, affecting companies like Booking Holdings, Hyatt, Hilton, and Marriott;
• Cruise lines also hit: Stocks of major cruise operators, including Norwegian Cruise Line, Carnival, and Viking, declined as well;
• Macroeconomic uncertainty: Rising inflation, interest rates, and concerns about a potential slowdown in consumer discretionary spending are weighing on airline revenue forecasts;
• Shifting travel trends: While international travel demand remains strong, domestic travel demand appears to be weakening, affecting U.S.-based airlines more significantly.

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