The Ratings Game: Is the travel boom fading? Analysts are getting more skeptical about 2023.

“Travel demand is likely to moderate amidst macroeconomic slowdown in 2023 and consensus does not appear to reflect the magnitude accurately,” analysts Deepak Mathivanan, Zach Morrissey and Jack Halpert wrote in a note to clients.

The analysts also said that many online travel platforms have “ventured into less efficient customer acquisition channels” over the past 12 to 18 months, and that there were few options available to expand margins.

Wolfe Research said Booking Holdings’ BKNG, +0.46% exposure to Europe, where the pain from inflation and an energy crisis has been more pronounced, was a risk for the company heading into next year. The analysts downgraded the stock to their version of a hold rating. They also downgraded both Expedia EXPE, +0.56% and Tripadvisor TRIP, -0.80% to their version of a sell rating, from hold.

The recovery in Expedia’s lodging business had lagged its peers, and its rebound overall faced pressure from Booking Holdings’ “aggressive” investments in markets like the U.S., the analysts said, adding that Expedia is also at risk of “sustained share losses during a potential downturn in 2023 given its sub-par marketing efficiencies and product mix.”

For Tripadvisor, they noted that its appeal to travelers is “eroding steadily as travel research continues to expand beyond Tripadvisor in recent years.” Another risk heading into next year, they said, was the company’s “significant revenue concentration in the core Hotel auction business.”

The analysts kept their version of a hold rating on Airbnb Inc. ABNB, -0.14%. They said the online platform, which offers short-term stays at other people’s homes, faces challenges as the platform’s novelty wears off. They said shifts toward “alternative accommodations” are likely to be less meaningful in the future and that the uptick in pandemic-related demand could fade.

“[Airbnb] has benefited from strong growth in use cases such as long-term stays (LTS) and suburban stays on the platform,” the analysts said. “These trends are supported by flexible work policies to some extent. As we look ahead, we do not expect sustained growth from these use cases as pandemic behavior reverts slowly.”

Shares of Expedia fell 6% to 90.67 on Wednesday, while Tripadvisor lost 6.1% and was trading at 17.86. Booking Holdings dropped 3.5% to 1970, and Airbnb retreated 3% to 90.34.

Wolfe Research downgraded the sector after travel demand roared back this year following two years of COVID-19 restrictions. That demand pushed prices for airfares and hotel stays higher and ran up against understaffed airlines, bad weather and flight cancellations.

Still, airline executives have remained bullish heading into 2023, despite rising prices for basics. Southwest Airlines Co. LUV, +1.39% on Wednesday reinstated its quarterly dividend in connection with its Investor Day and said it expected “strong leisure and business revenue trends” to continue in the fourth quarter. While airline management left the outlook for that quarter largely unchanged, it said it expected solid leisure demand to extend into the first quarter of 2023.

JPMorgan analysts, in a note on Tuesday assuming coverage on cruise lines, said there was still more to like than not about those stocks, citing pent-up demand. But they also noted “macro concerns and the potential for additional debt and/or equity raises in an environment where capital costs have risen materially.”

Travel stocks have generally fallen this year. Most analysts have buy ratings on Booking Holdings and hold ratings on Expedia and Airbnb, according to data tracked by FactSet. A majority of analysts have a hold or sell rating on Tripadvisor.