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Hotels, airlines prepare for travel boom as U.S. eases travel restrictions

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As the U.S. eases international travel restrictions for 33 countries, Yahoo Finance's Emily McCormick, Brian Sozzi, and Julie Hyman discuss how hotels, airlines, ridesharing companies, and retail can benefit from the pent-up demand.

Video Transcript

EMILY MCCORMICK: Well, welcome back. It's time now for our chat about the morning brief. And today it's on travel. The US today has officially eased travel restrictions for foreign nationals entering the country by either land or air, as long as they're vaccinated and receive a negative COVID test within a few days of their journeys.

Now this is set to, of course, be a big boost for the travel and lodging companies from airlines to hotel firms. But Brian, as you pointed out in your morning brief on the Yahoo Finance website this morning, retailers may also be getting a big boost from this development as well. What are you seeing here as being this boost?

BRIAN SOZZI: A lot of potential winners here, Emily. Let's start with the hotels though, because I think that is the most obvious beneficiary. And I just want to give a taste to investors watching this right now, what could be coming here. And this comes complements of Airbnb's co-founder and CEO Brian Chesky on his earnings call last week.

He said, quote, "Within one week of that announcement--" And he means the Biden administration announcing it would end the travel ban-- "We saw a 44% spike in nights booked for stays, crossing borders coming into the United States on Airbnb for stays November 9 and later, which is when the borders would open. So what we are seeing kind of across the board is evidence of pent-up demand."

Now that is a tone or just a commentary that I've been hearing from a lot of hotel executives on their earnings calls. Heard it also too when Hilton CEO Chris Nassetta came on with us last week for our travel special. A lot of pent-up demand. Now hotels should benefit. Of course, the airlines will benefit. I would even say, and as I mentioned in a newsletter, Uber and Lyft will benefit from more people going from airports to wherever they need to go.

But also, Emily, as you mentioned, the retailers. You know, that will be also an area of big benefit here. A lot of these retailers still operate very large flagship stores in urban destinations. One of the biggest names, obviously, of course, is Macy's in Herald Square that has been absent in those very lucrative tourist shoppers for close to 19 months. That could be a big tailwind to many retailers, and of course, Macy's as it gets back those shoppers.

And it also could benefit the economy here. And Goldman Sachs putting a nice framework around how much of a lift we can see, saying based on the partial recovery in arrivals to the US from a few countries, not subject to restrictions, we estimate the end of the travel ban will restore another 10% to 15% of pre-pandemic spending by tourists and other non-residents by the first quarter of 2022-- could lift GDP by about 2/10 of a percent by later next year. So that is a good tailwind for them, overall.

But of course, we'll take more of this a little bit later. I'm talking with the CEOs at Hyatt and Marriott later on today. The whole-- mostly hotel industry back in the city for their annual Lodging Conference. I'm going to catch up with them a little bit later on today.

EMILY MCCORMICK: Right, Brian. And of course, these restrictions did just ease today. But even taking a look at some of the TSA checkpoint travel numbers, which of course, tracks the number of visitors that we have going through US airports, those have already been on the rise here. Just yesterday those were up at about $2.2 million. That compares to about $2.4 million on the comparable day in 2019. So already, even before these restrictions were lifted, already seeing a little bit of a boost here in these air passenger numbers.

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