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Travel companies in the US are resilient enough to absorb Middle East shock.

Early earnings reports show that travel companies, including hotel chains and cruise operators, relied on the resilient U.S. leisure and business demand. They also benefited from a temporary boost from World Cup to offset the effects of the Middle East war.

Fuel costs have increased and international travel has been disrupted by the?conflict. However, earnings reports released on Tuesday indicate that many consumers are not deterred by economic uncertainty or higher travel costs.

The founder of GetCruiseInfo.com, Brian Rooney, said that "JetBlue Hilton and Royal Caribbean have all shown continued strength with higher-valued products. This suggests that travelers still prioritize experiences, even though they are becoming more selective in their discretionary spending."

These results confirm that we are still experiencing a K-shaped economy in travel. While higher-income travelers book premium experiences, value-conscious travellers adjust when and how to travel instead of giving up vacations entirely.

Hilton Worldwide Holdings has raised its forecast of full-year revenue growth, driven by strong demand for its luxury properties, and the expected benefits to the third quarter from the World Cup. However, the U.S. hotelier's Middle East -and Africa room revenue fell 29.5% compared to the previous period.

Hilton CEO Christopher Nassetta stated in a conference call that the World Cup helped boost earnings, but mid-scale hotels saw the greatest turnaround, as they benefited from the business and group travel market.

Hilton's RevPAR (room revenues) grew by about 1.7% in the second quarter due to the soccer event.

Visa, the world's largest processor of payments, noted an?improvement from the event.

Chris Suh, Chief Financial Officer of the United States, said that the total card-present spending in the U.S. increased. Card-present transactions rose as much as 20 percent in certain host cities during match days at the FIFA World Cup.

The entertainment and restaurant categories saw the largest growth in cross-border spending.

Royal Caribbean, the cruise operator, raised its profit forecast for this year but cut its revenue growth projection as it accounted for a slight drop in bookings due to prolonged geopolitical tensions.

The Miami-based company reported an increase of 27% in its quarterly fuel costs to $355 millions from the previous year, but reduced its forecast for full-year fuel expenses from $1.35 to $1.34 billion.

Royal Caribbean's chief financial officer, Naftali Hoetz, said: "Consumer interest in our vacation experiences continues to be strong and guests are willing to spend money on memorable experiences."

The war in Iran has been a major blow to the airlines. Although most U.S. airlines recovered?nearly 50% of the increased fuel costs caused by the conflict during the second quarter, the outlook for their profits remains uncertain.

The price of air travel is expected to remain high.

JetBlue Airways reported that higher demand and higher fares allowed it to recover more fuel costs than anticipated, even though the New York-based carrier's quarterly fuel bills ballooned by?nearly 80%, or approximately $407 million.

JetBlue's President Marty St. George stated during an earnings call that "nobody likes fare increases" but, at the end, we need to cover costs.

As volatile fuel prices resulting from the war have moderated, the airline's visibility for?the second half of the year improved.

Travel is the most resilient part of luxury. Adam Sebba is the CEO of The Luminaire, a luxury travel agency based in London.

(source: Reuters)