Expedia expects 2016 to build on a good year for travel in 2015, although question marks remain over the impact of terrorism and uncertainty in the global economy.
Addressing 3,500 delegates at this year’s partner conference in Las Vegas, Mark Okerstrom chief financial officer and vice president operations said economic indicators were broadly positive.
He pointed to both US and UK growth and improved consumer confidence as indicators of the improved economic conditions but warned about the slowdown in China and issues in Latin America.
“The economic story on a global basis has actually been relatively positive. GDP growth generally has been north of 3% but the way we have got there has been relatively mixed,” he said.
“In travel 2015 has been a pretty good year. Airlines continue to be more profitable than they have ever been and in the lodging [hotel] industry things are looking very healthy. There are a few areas if weakness but overall things are looking pretty good.”
Okerstrom said the mixed economic picture has fed through to the markets with stocks having been on a roller coaster rise and low oil prices hurting emerging economies like Brazil.
Countries have also been devaluing their currencies against the US dollar making overseas travel more expensive so more people are holidaying at home, although he said this has had no impact on Expedia due to its staycation business.
“When we have this mixed news, mixed economic performance, what we see is a lot of turmoil in the markets in general. If you are an investor you really had to have your seatbelt on during this ride because it’s been a rocky one.”
Okerstrom said a big question remained as to whether the threat of global terrorism could be restrained after the November 13 attacks in Paris and the downing of a Russian aircraft over Egypt.
“If it worsens that’s a cause for concern,” he said, “but generally economists are looking for improvement in 2016 in the US, Europe and Latin America.”
The impact of terrorism was also addressed by Expedia chairman Barry Diller and president and chief executive Dara Khosrowshahi.
Khosrowshahi said: “Travel is a force for good, it brings people together and finds the commonality in people rather than the divisiveness we see in parts of the world that really is a horrible force.
“In a world that’s increasingly uncertain, that has lots of opportunities and that has so much change coming we can say we are happy to be facing this world arm in arm, shoulder to shoulder with you are partners.”
Diller, who is also chairman and senior executive of IAC, which spun off Expedia in 2005, said IAC was poised to conclude the purchase of Expedia when the September 11 attacks on New York took place in 2001.
He said IAC had the option to pull out of the deal but it he chose not to and within months that decision was proved right as the travel sector got back on the road to recovery.
“If there’s life there’s travel and we have to, in these complicated, difficult times in so many places, believe it will work out.”
Diller added that overwhelmingly there were good things happening in the word like the number of people being lifted out of poverty and China and Asia becoming economically productive.
And he said he was confident the current problems with terrorism in certain regions of the world will pass.
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