🏖️ Vacay earnings

Tuesday, May 3, 2022 by Robinhood Snacks |
Packed week of travel earnings (Peter Dazeley/Getty Images)

Packed week of travel earnings (Peter Dazeley/Getty Images)

Packed week of travel earnings (Peter Dazeley/Getty Images)

Packed week of travel earnings (Peter Dazeley/Getty Images)

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Hey Snackers,

A fowl situation: a wild turkey — described as “increasingly aggressive” — is attacking people in the nation’s capital. Several agencies are in hot pursuit of the wanted bird.

Stocks jumped on the first trading day of May, after capping off their worst month since lockdowns hit in March 2020. The 10-year Treasury yield — which affects what you’ll pay for a mortgage and other loans — hit 3% ahead of this week’s Fed meeting.

Coach

1. From Delta to Expedia, travel companies are still on the rebound — but the economy isn’t feeling the vacay vibes

Stocking up on mini shampoos... one bottle = one squeeze. It's hospitality week, with Hilton, Marriott, Airbnb, Booking.com, and Royal Caribbean dropping earnings. First up: Expedia reported sales were up 81% from last year as bookings reached pandemic-era highs. Ahead of the rest, we're checking in on travel:

  • In the sky: TSA traveler volume is almost back to 2019 levels, as you reveal holes in your socks en route to Cabo. Delta returned to profitability in March, while United and American expect to hit green this quarter.
  • On the bed: Disappearing mandates, spring-break getaways, and inflated room prices are helping hotels. In March, US hotel profit per available room reached its highest level since 2019.
  • On the card: Amex saw travel spend more than double last quarter as you swiped for gate-side chardonnay, while Mastercard said cross-border travel beat 2019 levels for the first time since the pandemic.

Flying coach to Stagecoach... Travel companies are considered "cyclical" because they tend to do well when the economy thrives (and vice versa). ICYMI: the economy isn't exactly crushing it. US GDP shrank last quarter, and global economic growth forecasts have been slashed. Still:

  • Travel-related companies have outperformed on earnings compared to their cyclical peers (think: tech, banks, construction).
  • Some travel stocks are beating the market. Delta, Southwest, United, and Marriott shares are all up over 5% for the year, while the S&P 500 is down nearly 14%.
THE TAKEAWAY

The vacay rebound doesn’t appear to have peaked yet… Unlike the booms experienced by tech and banks last year, travel companies have seen more of a slow-and-steady climb (peppered with Covid-related dips). So far, it looks as if it’s still going, and Visa said demand for summer bookings is “very high.” But inflated prices, war, and new Covid outbreaks could threaten the jet-set recovery.

Nomad

Hold on to your sweatpants… Offices are becoming optional. Airbnb has reversed its plans to return to offices in September, telling workers they can WFH forever — without pay cuts. It’s a sharp reversal: Airbnb laid off a quarter of its workers during lockdowns as travel collapsed. But bleisure (long trips that blend business and leisure) helped business rebound, and now Airbnb wants its 6K+ workers to join in:

  • Bay Area salary… but in Belize. Airbnb’s new policy lets workers live and work in 170+ countries for up to 90 days (after that, visas get complicated). The company plans to host quarterly in-person events for workers.

Return-to-office roulette… Pajama-wearing workers have gotten so comfortable WFH that their employers are struggling to get them to return: half of companies expect workers back in the office five days a week, but 90%+ of WFH warriors want to stay remote. To keep them happy, companies have adopted several return-to-office strategies.

THE TAKEAWAY

Work-from-anywhere is the new kombucha on tap… a popular perk among workers and an important hiring strategy for flexible employers. The option to work from St. Barts for full pay could inspire an applicant to work for Airbnb instead of Apple — a big deal in today’s tight labor market. Airbnb’s CEO, Brian Chesky, said he expects other companies to go remote so that they don’t “limit their talent pool.”

What else we’re Snackin’

  • Rebuff: Spirit Airlines rejected JetBlue’s $3.6B takeover bid, saying it would stick with plans to merge with Frontier. Spirit execs weren’t optimistic regulators would’ve given the go-ahead to JetBlue’s proposal.
  • Tap: Europe is accusing Apple of restricting access to the tech behind Apple Pay, saying the Fruit is abusing its market power in mobile payments. It's the latest EU antitrust action focused on Big Tech.
  • Bananas: Yuga Labs, the startup behind the popular Bored Ape NFT series, sold >$300M of virtual real estate in a yet-to-be-built metaverse. There was so much demand that the mint crashed the ethereum network.
  • Link: Ukraine says ~150K people are using SpaceX's Starlink internet service every day. The satellite-based network has made it harder for Russia to interfere with Ukrainian comms.
  • Crown: Not even Meghan Markle’s safe from Netflix's belt-tightening. The streamer has dropped the duchess' upcoming animated series, “Pearl,” as it looks to cut costs after a drop in subscribers.

Snack Fact of the Day

The sun makes up 99.8% of the solar system's mass

Tuesday

  • Earnings expected from Avis, Pfizer, EstĂ©e Lauder, Airbnb, Starbucks, Hilton, AMD, Molson Coors, Public Storage, Lyft, and Caesars Entertainment

Authors of this Snacks own: Ethereum, and shares of Starbucks, Microsoft, Amazon, Google, Apple, Netflix, and Delta

ID: 2182422