US hotels turn travel demand into gold while airlines struggle

US hotels turn travel demand into gold while airlines struggle

A man leaves the Four Seasons Hotel, which was later clarified by President Donald Trump’s official Twitter channel as not the Four Seasons location mentioned for the legal team’s press conference, in Philadelphia, Pennsylvania, U.S. November 8, 2020. The press conference was then held at the Four Seasons Total Landscaping company in Philadelphia. REUTERS/Mark Makela

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Aug 5 (Reuters) – Staff shortages, airport chaos and higher fuel costs have caused earnings at U.S. airlines such as JetBlue Airways to fall short of analysts’ expectations, while hotel chains including Marriott International reported double-digit profit growth.

Despite cutbacks in other categories due to recession concerns, consumers eager to travel after the pandemic continue to book flights and hotels. Hotels have been able to turn this demand into increased profitability far more effectively than airlines.

David Tarsh, spokesman for travel data analytics company Forward Keys, said the problems facing airlines and airports are more difficult to solve than those in the lodging industry.

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“When it comes to hospitality labor, your shortage is probably more in less skilled workers than in the case of the aviation industry,” he said. “If you’re short of cabin crew and you’re short of airport security, you can’t just raise wages and suddenly fill those roles. People have to be trained as well.”

US airlines are struggling to offset higher costs such as fuel, even as rising travel demand has given them strong pricing power.

JetBlue Airways Corp ( JBLU.O ) reported a quarterly adjusted loss of 47 cents per share on Tuesday, compared with analysts’ forecasts for a loss of 11 cents.

United Airlines Holdings Inc ( UAL.O ), American Airlines Group Inc ( AAL.O ) and Delta Air Lines Inc last month reported quarterly results below analysts’ expectations.

Meanwhile, hotel bookings are increasing. Marriott International Inc ( MAR.O ) on Tuesday topped Wall Street estimates for quarterly revenue and profit, helped by higher occupancy levels and room rates as travelers booked more group tours and longer stays. read more

Last month, Hilton Worldwide Holdings ( HLT.N ) saw profits rise above pre-pandemic levels. On Wednesday, MGM Resorts International ( MGM.N ) reported profit that was 25% higher than in the second quarter of 2019, and said staff shortage problems appeared to be easing.

“Generally, we are in good shape. We’re not running around with our hair on fire, if you will, anymore,” MGM Resorts CEO Bill Hornbuckle said in Wednesday’s earnings call.

Host Hotels & Resorts Inc ( HST.O ), which operates hotels under the Four Seasons, Grand Hyatt and Ritz Carlton brands, reported a profit of 36 cents per share, beating analysts’ forecasts.

“We’re up in the double digits in terms of total revenue (growth) for Thanksgiving. And actually, for Christmas, we’re seeing a solid uptick as well,” Host CEO Jim Risoleo said on a call with analysts Thursday.

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Reporting by Gigi Zamora; Editing by Anna Driver and Cynthia Osterman

Our standards: Thomson Reuters Trust Principles.

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