Hotels & travel

Travel is one of the largest consumer industries in the world. It covers hotels, online booking sites, home rentals (Airbnb), cruise lines, and theme parks.

What ties them together is one thing: when the economy is healthy and people feel safe, they travel. When it isn't, they don't. Travel demand is highly tied to consumer mood.

A guest finds the hotel — directly, via an online booking site like Booking.com or Expedia, or through a travel agent. They pay the hotel. The booking site keeps a 15-20% commission.

This is why online booking platforms can be more profitable than the hotels themselves. They take a slice of every transaction without owning any rooms.

Hotels make money from room nights, food and drink, events, and increasingly, loyalty programs (similar to airlines).

Booking platforms make money from commissions on every reservation. Airbnb takes a cut of both the guest's payment and the host's payout. Cruise lines sell rooms and then make most of their margin on drinks, excursions, and casinos.

Hotels are expensive to build and the rooms can't be re-sold the next day — an empty Tuesday night is gone forever. The biggest hotel chains today are "asset-light": they don't own most of the buildings, they license their brand to local owners and run the loyalty program.

That model is much more profitable. Marriott, Hilton, IHG all run on it.

Owning a Marriott means you're betting on travel demand and one specific brand. Owning Booking Holdings or Airbnb means you're betting on travel demand and a smaller slice of every booking, regardless of brand.

Historically, platforms have grown faster than the hotels themselves.

Recessions, pandemics, terrorism, natural disasters — anything that scares people indoors hurts the entire sector at once.

Regulation is the newer risk: cities like Barcelona, Amsterdam, and New York have cracked down hard on Airbnb. Cruise lines face environmental rules around emissions.