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Booking Holdings, Norwegian, and Seaworld report Q1 losses as COVID continues to affect travel

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Norwegian, Booking Holdings, and Seaworld suffer Q1 losses as the world continues to be ravaged by COVID. Julie Hyman, Myles Udland, and Brian Sozzi break down the state of the travel industry.

Video Transcript

MYLES UDLAND: All right, welcome back to Yahoo Finance Live on this Thursday morning. Let's take a look at some travel names that are on the move today after reporting their results after yesterday's close or before today's open. Brian Sozzi, let's start with what's happening over at Norwegian Cruise Line, a stock not doing a whole lot right now. And certainly, we have seen a large run in that name. But how is Norwegian, I guess, thinking about where they're at in their journey in reopening trade?

BRIAN SOZZI: Yeah, Myles, I don't think the quarter is that much in focus by investors. That was known six months ago, essentially no sales here. What is important is the forward-looking metrics here for a company like Norwegian and, of course, Carnival Cruise Line and their competitors when they report. Norwegian saying they will start sailing from overseas locations in July and August across their Norwegian cruise line Oceania and Regent Seven Seas cruise line businesses. So that's good.

They're also talking about bookings. They're saying bookings have been, quote, "strong for future periods." Also, 2022 bookings and pricing trends are, quote, "very positive." But I think the market knows this. So it's very important that they nail this earnings call. To your point, Myles, Norwegian shares are up 73% over the past six months. The stock now trades at 60 times forward earnings, according to Yahoo Finance Plus data. So there's a lot of expectation on a very strong recovery built into Norwegian and also a lot of its peers.

JULIE HYMAN: Yeah, most definitely. Apologies, by the way. Sparky is weighing in on the Norwegian Cruise Line situation here this morning.

BRIAN SOZZI: Bullish on the stock.

JULIE HYMAN: Yes, he's bullish. He wants to get out. I just wanted to mention also that Norwegian talking about the new CDC guidance, that it's going to allow cruises to resume their sailing in July. So it's just reiterating that it does indeed plan to do that. Also, cash burn interesting, in line with the company's guidance of $190 million. And second quarter cash burn is going to be higher, $190 million a month. So, you know, if it does get delayed for some reason, the resumption of sailings, we'll have to watch that cash burn closely to see how its balance sheet looks as it goes through all of this idle period.

MYLES UDLAND: Yeah, another name that we're watching this morning, Booking Holdings stock is down about 2%, out with their report last night. Revenues down about 50% over last year. Really interesting call, going through a lot of the dynamics in their business. Julie, we're going to talk to CEO Glenn Fogle later today. But I think the way that they have and, I guess, because of their distribution have not, to an extent, been able to capitalize on the US reopening, at least-- and I know we'll get into this with Glenn-- it was an interesting dynamic to see and a strange one here, I think, for the company.

JULIE HYMAN: Well, if you look at Booking versus some of its competitors, it is more exposed to European. Booking sort of a legacy European company, right? And so, I think that that is partially responsible for what's going on here. Room night reservations down more than 50% in Europe. And Asia the least recovered region globally, which I think is somewhat surprising if you think about China, although perhaps not as surprising when you think about other areas on the continent like India. But certainly, outside of the US is part of the problem here at Booking. So we will definitely be talking about that.

Something else to keep in mind is some of the recovery that we have seen in travel has been in things like Airbnb, right, and VRBO, places where you can rent them to yourselves. So we are seeing that market very hot. That, too, is an area that Booking is relatively less exposed to. So, if you look at the listings of those kinds of apartments, homes, that represented about 30% of the company's room nights booked last year. So they're trying to work on getting-- attracting more of those types of rental units onto their site. So we can talk to him about that effort as well, which should help it if they can succeed, should help it catch up a little bit.

BRIAN SOZZI: Yeah, and definitely want to bring up with Glenn later on their longer term outlook for the travel industry. And they talked about it extensively on the call. It's not going to take one or two quarters to go back to pre-pandemic levels. You were potentially looking at years for full recovery. And then, secondarily, what does full recovery look like? Do you still have people using an Airbnb? We've all been cramped up in homes for a while. I kind of want to get pampered, y'all. I want to go to a hotel. I want the big plush towels. I don't want to sit in somebody's house.

MYLES UDLAND: Yeah, and, you know-- and another thing they mentioned on the call, Sozzi, is that once you bring in an Airbnb type reservation-- I think they were talking about the menu of options, right, that someone would consider for a vacation. So let's say you always went to cities, or you always went to an amusement park, and you stay in a hotel, and that all is good for Booking. Well, now maybe last year, you went to the mountains for the first time. And you're like, the mountains are pretty nice. So I'm going to consider that going forward.

And I think, you know, to those questions, Julie, that you brought up around the recovery in travel, I think the future of travel-- and it's a generic talking point, but it is true-- has probably been changed in terms of what companies assume people would consider. I think is going to be a big change on the other side of the pandemic. We don't know exactly how that will play out over time. But it seems certain that people have been-- they've had their eyes opened to other possibilities, whereas, previously, they might have only said, I will go to the beach every year. And that is going to be my one vacation.

Another place people won't be going on vacation is SeaWorld. That company out with its latest report. Julie, what's the story here for a company that obviously has a lot going on, or has had, over the years, a lot going on outside of the core business? But really, part of the parks' reopening trade, which we've seen the enthusiasm around Disney's properties and also Universal.

JULIE HYMAN: Yeah, let's talk, first of all, about the net loss of the company-- nearly $45 million, which is a smaller loss than it saw a year ago. Total revenue up 12% year over year. What's interesting here, SeaWorld also, if we look at comps to 2019, revenue was still down about 22%. So not back to where it was, but certainly a significant improvement over the first quarter of last year. Same goes for attendance, 2.2 million people visiting SeaWorld in the first quarter, which is a decline of about 4 and 1/2% from the first quarter of last year. Interesting here-- compared to the first quarter of 2019, it's a decline of about 34%. So, big, but not insurmountable. So the trajectory looks relatively positive for SeaWorld here. And I guess, that's reflected in the relative performance of the shares, which you saw there were up about 1%, but kind of bouncing around here this morning.

BRIAN SOZZI: Maybe I'm dating myself here. Is Shamu still at SeaWorld?

JULIE HYMAN: I mean, probably a Shamu maybe at SeaWorld. But, you know, they also-- they had that PR situation for many years following that documentary that alleged mistreatment of the orcas, right? So that was a challenge, shall we say, for SeaWorld for many years there and caused a hit to attendance. So there's still, it looks like--

BRIAN SOZZI: Myles, you don't remember Shamu.

MYLES UDLAND: Yeah, I mean, I think the thing here for millennial parents, right, Julie, it's like, do you associate SeaWorld with "Blackfish," or do you associate it with "Free Willy"? And I think how you come down on that issue is likely to determine whether or not you take your family there. But to that point, Julie, on the PR side, the story at least hadn't been the main story for SeaWorld for a little bit. But this has also gone through the-- I think Blackstone was in here for a long time-- gone through the PE wringer over the years. Gone private, come public a couple of different times.