By Katherine Hamilton

The travel industry is heading into the summer blind.

Most U.S. airlines withdrew their financial projections for the full year after the industry showed the first signs that Americans are spending less on travel. The rest of the travel sector is holding its breath to see whether the demand decline will ripple into hotels and online booking platforms.

"Visibility on travel demand has become increasingly muddied," Melius Research analyst Conor Cunningham said in a note Monday. "The question that likely needs to be answered is how long this uncertainty will last."

Alaska Air, American Airlines and Southwest Airlines this week withdrew their full-year guidance, following in the footsteps of Delta Air Lines earlier in April. United Airlines was the exception, sharing one outlook that was the same as what it said in January and a lower one that accounted for a recession.

The withdrawn and altered outlooks did little to clarify how other travel companies can expect demand to evolve this year. If uncertainty and economic turbulence snowball, other travel companies will start to feel the effects, Cunningham said.

The Dow Jones U.S. Hotels Index has declined 15% this year, hit a 52-week low on April 8. The Airlines Index has lost 31% of its value and also fell to a new 52-week low earlier this month.

Airlines said they experienced the biggest declines in domestic leisure travel. Companies are cutting back on business trips and government-related travel has fallen by as much as 50%, United said. High-income travelers flying in premium-cabin seats and taking trips abroad are still spending, but Americans and international tourists traveling in the U.S. have pulled back the most.

Other travel companies with short booking windows and large U.S. footprints are likely to be among the first to see dented demand in their bottom lines, Cunningham said. He expects hotels and online travel agencies to start seeing slower domestic and off-peak travel, mirroring what airlines have reported.

Lodging companies in March started experiencing a slowdown in domestic bookings, and Americans' spending on lodging in the U.S. declined in the first quarter, Bank of America analysts said. Payments platform Fiserv said Thursday it tracked spending declines in travel and hotels during the first quarter.

Over the next month, companies including Expedia, Booking, Airbnb and major hotel chains are scheduled to report earnings. Analysts don't expect the companies will follow airlines in withdrawing outlooks, but many are anticipating guidance cuts.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

April 24, 2025 11:50 ET (15:50 GMT)

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