When the pandemic started, air travel soared and costs plummeted. After two years of COVID restrictions, however, people began to grow restless. With restrictions lifted, the travel boom has now reignited and shows no signs of slowing anytime soon.

The current travel boom is present in many forms. Not only have air travel and cruise bookings experienced a huge increase despite rising prices, but hotel bookings have also demonstrated an increase in both cost and length of stay.

Anne and Carl Deane report that this not only signals sizable increases in profits and market shares across travel companies, but it appears that the numbers across all sub-markets will continue to hold steady into the start of 2023 as well.

Effects on Air Travel

No company better exemplifies the effects of the travel boom than Southwest Airlines. After losing money at the end of 2022 due to damaging systems errors that caused thousands of flights to be grounded, the company now finds itself on track to increase earnings in 2023 with growth margins predicted to hit triple digits.

This growth extends to the rest of the industry as well. Altogether, the International Civil Aviation Organization estimates that companies will experience profit increases over their pre-COVID numbers by approximately 3%. Some of the airlines expected to partake in these increases include:

• Alaska Air
• American Airlines
• Delta Air
• United Airlines

While 3% may sound like a small increase, it’s notable that this forecast extends to the industry as a whole, including many smaller airlines as well as popular mainstays such as American and United. Mileage may vary (pun intended) depending upon the popularity of the airline, though, as well as any post-COVID cost increases that are put into effect.

Cruise Bookings During the Travel Boom

More sizable increases in market value may impact cruise lines. Two cruise operators in particular, Carnival Corp and Royal Caribbean Cruises, report 85% stock increases from October of 2022 to February of 2023.

These increases come as a bit of a shock, though. Putting aside the lack of previous COVID restrictions, cruises tend to endure reduced popularity during times of inflation. Even so, market spectators expect further growth throughout the year.

While this growth seems promising, it will need to remain steady in order to fully pull cruise operators out of hot water. Among travel industries, cruise lines took some of the hardest knocks during the pandemic. Although Royal Caribbean’s year-to-year revenues increased 170% in the last quarter of 2022, the company still reported an overall loss.

The Travel Boom and Hotel Bookings

Booking Holdings, an umbrella corporation handling everything from hotels to rental cars, dominated at the end of 2022 with a 36% rise in quarterly revenues as well as a 56% increase in market value. This was merely a drop in the bucket compared to their yearly revenue increase of 162%.

The hotel industry at large appears set for similar gains. Global hotel titan Marriott, for instance, may very well increase earnings by at least the double digits throughout 2023 and 2024. Even vacation rental broker Airbnb predicts profit increases of at least a quarter from 2022 to 2023, with only a slight reduction in earnings increases through 2024.

Conclusion

Despite ongoing attempts to halt inflation, its current continuation leaves all of these estimates in flux. If predictions hold true, though, then the travel industry should be well on its way to recovering from COVID, feeling stronger than ever. Even in sub-markets where increased earnings are believed to have peaked in 2022, the next two years should prove quite profitable indeed.