Why Expedia Group, Airbnb and other travel stocks are seeing one of the biggest-ever fall

Tourism-related stocks took a significant hit on Tuesday, March 11, after several major US airlines issued warnings about declining travel demand, sparking concerns over the health of the broader American economy. Shares of Expedia Group (EXPE) were among the hardest hit, plummeting about 8% and making the travel giant one of the biggest decliners in the S&P 500. Airbnb stock too faced a rout.
The selloff followed cautious outlooks from Delta Air Lines (DAL), American Airlines (AAL), and Southwest Airlines (LUV), all of which lowered their forecasts for key first-quarter 2025 metrics, including revenue, earnings per share (EPS), and available seat miles. Airline executives attributed the downward revisions to an uncertain macroeconomic environment and disruptions caused by severe weather events, such as the California wildfires in January.
Despite the gloomy industry outlook, Southwest Airlines shares managed to buck the trend, climbing higher after the company announced new revenue-generating initiatives like the introduction of baggage fees. The ripple effect of the airlines’ warnings was felt across the travel sector. Booking Holdings (BKNG) and major hotel chains including Hyatt Hotels (H), Hilton Worldwide Holdings (HLT), and Marriott International (MAR) all saw their shares slide on Tuesday. Cruise line stocks also suffered, with Norwegian Cruise Line Holdings (NCLH), Carnival Corp. (CCL), and Viking Holdings (VIK) registering declines.

The huge dip in travel stocks comes just a day after billions were wiped out from the market cap of America's biggest technology stocks. Apple, Microsoft, Tesla, Nvidia, Google-parent Alphabet, Amazon and Meta make America's Magnificent Seven. These seven biggest American technology companies are known for their market dominance. In stock market carnage just a day earlier (March 10), these seven most valuable tech companies lost more than $750 billion in market value.