The fast-spreading Omicron variant is beginning to take its toll on the spending plans of consumers, new data out of Bank of America reveals.
Total airline spending on Bank of America's credit and debit cards fell 15% on a two-year basis for the week ended Dec. 4, according to BofA U.S. economist Anna Zhou. The figure marked a 13 percentage point plunge for airline spending, compared to the prior week.
"The weakness seems to be driven by cancellations of international trips: when we looked at the indexed levels of air ticket refunds, we found a meaningful pick up in refunds from non-U.S. carriers and little change in refunds from domestic carriers," Zhou said.
Weakness in travel spending runs counter to the bullish moves in airline and lodging stocks in the past week.
For instance, shares of Marriott and Delta Air Lines have shot up by 4.5% and 4%, respectively, in the past five sessions on news the new variant appears less lethal to vaccinated people than previously thought. The Arca Airline Index (XAL) — which tracks the share prices of the major airlines —is up nearly 7% in the last five trading periods.
Other data from BofA is equally as cautionary on current consumer spending plans.
BofA's measure for holiday sales spending was up 6.7% year-over-year for the week ended Dec. 4 and up 24.3% on a two-year basis. Both gains represented a deceleration from the prior week.
"In our view, the slowdown in the 1-year and 2-year growth rates reflects a smaller incremental boost to spending from Cyber Monday than prior years given the more spread-out shopping this year. On an indexed level, the pace of holiday shopping has slipped below that of prior two years," notes Zhou.
Rent the Runway co-founder and CEO Jennifer Hyman says the Omicron variant hasn't yet hurt demand for its services, but the company continues to monitor the situation very closely.
"We carefully monitored the Delta variant and have been pleased with our growth in Q2 and Q3 as the Delta variant spread and peaked throughout the U.S. To date, we've seen a similar trend that Omicron is not specifically impacting customer demand or engagement patterns," Hyman told analysts on an earnings call Wednesday evening.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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