Turbulence Ahead? 3 Travel Stocks to Scrutinize After the Expedia Layoffs

Industry Overview - The travel industry is experiencing a post-pandemic boom, but demand is beginning to slow down, leading to layoffs and financial adjustments among major players [1] - Expedia announced the termination of 1,500 employees, representing 9% of its workforce, due to declining demand, which is expected to impact its bottom line by $80 million to $100 million [1] - Booking Holdings and Sabre also anticipate weaker financial results, indicating a broader trend in the industry [1] Company Analysis: Expedia - Expedia's workforce reduction highlights the challenges faced by online travel agents amid decreasing demand [1] - The company's financial outlook is negatively affected by the layoffs, with significant cost implications [1] Company Analysis: Carnival - Carnival, the largest cruise ship operator, has not fully recovered to pre-pandemic levels, with shares trading 65% to 70% below their previous highs [3] - Despite a 76% increase in stock price over the past year, Carnival still carries $28.5 billion in long-term debt and only $2.4 billion in cash, with $5 billion in liquidity [4] - Booking volumes are at record highs, with customer deposits reaching $6.4 billion, indicating strong demand despite economic pressures [4] Company Analysis: United Airlines - United Airlines has improved since the pandemic but remains 43% below pre-COVID stock levels, facing challenges from Boeing's operational issues [5] - The airline recorded a $600 million GAAP net profit last quarter, a 28% decline from the previous year, and has nearly $30 billion in long-term debt [5] - High interest rates, elevated jet fuel prices, and labor costs are significant concerns for the airline's profitability [5] Company Analysis: Airbnb - Airbnb is showing resilience in a declining market, with stock up 22% year-to-date and over 38% higher than a year ago [7] - The company reported a 17% revenue growth last year, with profits more than doubling to nearly $5 billion, and gross booking values increased by 16% to $73 billion [7] - Airbnb's diverse offerings and global presence allow it to adapt to changing travel demands, maintaining a strong market position [7][8]