US-based travel companies plan layoffs ahead of 2025
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Online travel agency Booking.com may cut jobs after already slowing its headcount growth in the last year.
PHOTO: REUTERS
NEW YORK - US-based travel companies, from Marriott International to Booking Holdings, are trimming their budgets and workforces ahead of 2025 as falling leisure travel demand from lower-income travellers hits top-line growth.
Diminished demand for budget hotels reduced growth in the hotel business in 2024, and that trend is expected to continue in 2025.
Real estate analytics company CoStar and global travel data firm Tourism Economics in November downgraded their 2025 outlook for room revenue growth to 1.8 per cent from 2.6 per cent.
“We anticipate these recent trends to moderate and for overall demand growth to be slightly stronger next year,” said Mr Aran Ryan, director of industry studies at Tourism Economics, a subsidiary of Oxford Economics, as higher-income consumers still have strong intentions to travel.
The cuts are happening across the leisure industry, from hotels to travel bookers to resorts.
Hotel operator Marriott told investors in November that it will cut its annual pre-tax and administrative costs by between US$80 million (S$107 million) and US$90 million, and later said it would lay off more than 800 corporate-level employees in the first quarter.
“Marriott is going to implement layoffs early next year as the result of a poor earnings turnout,” said Ms Sylvia Jablonski, chief investment officer of Defiance ETFs. “This sounds like a move towards running a leaner and more efficient Marriott.”
Online travel agency Booking.com, a brand of Booking Holdings, said it could cut jobs after already slowing its headcount growth in the last year. In the third quarter, Booking’s workforce increased 3 per cent year over year compared with a 13 per cent increase the year prior.
“We are being more efficient and we are very careful with hiring,” Booking chief financial officer Ewout Steenbergen told investors on an earnings call.
Ski resort operator Vail Resorts said it is planning US$100 million in annualised cost savings by the end of 2026, with plans to cut 14 per cent of its corporate workforce.
Some companies have said they will rely more on automation to lower costs.
Norwegian Cruise Line Holdings is planning US$300 million of savings through 2026, amid record demand for cruise travel, as it consolidates back-office activity through the use of low-cost technology.
Timeshare company Marriott Vacations Worldwide, which split from Marriott International in 2011, plans to save US$50 million to US$100 million annually over the next two years, in part via automation efforts. REUTERS