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The long-awaited return of corporate travel is starting to show signs of picking up in the US.
Corporate bookings hit their highest level since the pandemic began -17.5% for the weekend. September 11 compared to the corresponding period in 2019, according to data from Bank of America. Corporate registrations have been running at a -25% pace since April relative to the pre-pandemic period.
BofA analyst Andrew DiDora said last week that Delta (NYSE:DAL) cited an increase in business bookings after Labor Day and said Southwest’s ( LUV ) September managed corporate travel would be 8% to 10% points better than August. The organization said the business travel recovery is happening in real time, with midweek hotel occupancy now higher than it was on weekends when the pandemic first hit.
The firm believes the post-Labor Day booking trend is encouraging and will help support the sector’s Q4 guidance. BofA expects further sequential earnings improvement in US airline coverage from 100 basis points to 200 basis points.
“We think the demand trends are driven by a significant improvement in corporate bookings and leisure demand. Bookings through OTA channels (our leisure travel proxy) have returned to pre-pandemic levels after tracking in 85. -90% in the summer.
The growth in corporate bookings is in line with domestic bookings in the off-peak season and global trends that have recovered by 95% from pre-pandemic levels.
A read on corporate airline bookings boded well for Marriott International ( MAR ), Hilton Worldwide ( HLT ) and Hyatt Hotels ( H ).
Airline stocks edged lower in the pre-market session on Monday as the S&P 500 broke through a key support level.
Watching: American Airlines ( AAL ), Delta Air Lines ( DAL ), Southwest Airlines ( LUV ), United Airlines ( UAL ), JetBlue ( JBLU ), Hawaiian Holdings ( HA ), Alaska Airlines Group ( ALK ), Allegiant Travel ( ALGT), Spirit Airlines (SAVE), Mesa Airlines (MESA), SkyWest (SKYW), Sun Country Airlines (SNCY), and Frontier Group (ULCC).
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