Investing.com — The online travel industry enters 2025 with mixed prospects, with analysts at Barclays (LON:) forecasting a more challenging environment ahead.
While 2024 ended stronger than expected, Barclays notes that increasing foreign exchange (FX) headwinds and lofty expectations are likely to dampen growth in 2025. The bank assessed several key names in a note this week:
Booking Holdings (NASDAQ:) stands out as a bullish pick in Barclays’ report, despite its relatively high valuation.
Barclays believes BKNG remains the “name to own” longer-term due to its “strong execution” and “expected growth (ex-FX),” supported by restructuring savings. “We don’t think there’s much rationale for further multiple re-rating, but there is room for positive estimate revisions,” Barclays notes.
While FX headwinds may impact short-term growth, Barclays says BKNG’s international exposure and category mix, including double-digit growth in alternative accommodations and airfare, position it for continued success.
Airbnb, on the other hand, faces a more cautious outlook, according to Barclays. The bank pointed to “EBITDA margin compression” in 2025. The bank said the company previously signaled this margin contraction, but analysts remain concerned that “consensus is still too optimistic” regarding its ability to maintain profitability amid higher investments in expanding its reach. Barclays set a price target of $110 for ABNB, noting that while its “share vs. traditional lodging” is firming, growth initiatives come at a cost.
Expedia (NASDAQ:) presents a mixed setup, says Barclays. With the easiest revenue comparisons among peers, EXPE is said to benefit from its domestic exposure, which reduces the impact of FX challenges.
However, the bank cautions that the company faces softer domestic travel trends and uncertainty due to “management changes” and potential margin pressure. Analysts raised their price target for EXPE from $153 to $166, acknowledging its solid growth but highlighting the risk of execution challenges.
Lastly, TripAdvisor (NASDAQ:) is expected to face a tough 2025, with expectations too high for the company to meet. Barclays trimmed its growth assumptions, citing “sharp y/y declines” in the core business, even as Viator and TheFork show promise. Barclays expects “a point of margin compression” and remains cautious on TRIP’s outlook for the year.
