Companies like Airbnb and Hilton have also reported an overall slowdown in the U.S. leisure industry.
Operating income at Disney’s American theme parks fell in the third quarter of 2024, with the company reporting that easing consumer demand combined with macroeconomic factors are contributing to the decline.
Multiple other companies like Hilton and Airbnb have also pointed to a slowdown in the general travel and leisure industry in the United States.
While attendance at Disneyland and spending from visitors grew, the segment faced pressures due to “cost inflation, including from higher labor expenses,” he said at the time.
Meanwhile, Disney reported a 4 percent year-over-year gain in total revenues for Q3, 2024. Total operating income registered 19 percent growth while income before taxes improved from a loss of $134 million to over $3 billion.
Travel and Leisure
Hilton CEO Christopher Nassetta during a recent earnings call said that the leisure market has been “normalizing.”
Earlier, the market used to be at “very elevated levels,” he said, pointing to the funds people had in their banking accounts coming out of the pandemic. But now, people have less disposable income for things like travel, Nassetta said.
Hotel occupancy rates have declined for two quarters since November, Warren Marr, US Hospitality & Leisure Managing Director at PwC, pointed out.
The firm expects economic uncertainty, geopolitical tensions, and the upcoming elections to potentially affect hotel performance through next year.
On the positive side, travel costs have decreased, according to the U.S. Travel Association.
Seventy-three percent of Americans had committed to travel away from home at least for one night between May and September, it said, while 41 percent planned for multiple getaways at least 100 miles away from their homes for a minimum of one night.
The amount spent on a three-night trip has almost doubled over the past two years, the survey noted.
“From cityscapes and mountainsides to coastlines and canyonlands, this summer promises a jam-packed travel season as Americans look to plan multiple trips at a growing average length,” said Daniel Durazo, director of external communications at the firm.