Travel companies could be in trouble with a recessionary period could likely on the horizon, according to Wolfe Research. Analyst Deepak Mathivanan downgraded the online travel sector to market underweight from market weight, citing a potential demand decline as the economy contracts. That means a worse outlook for big names such as Booking Holdings , Airbnb , TripAdvisor and Expedia . “Every recession is different in terms of magnitude and impact on consumer spending in various categories,” he said in a note to clients. “Our downgrade thesis on travel is certainly not predicated only on macro trends. However, we struggle to see travel demand exhibiting high levels of resiliency and growth during a slowing economy in 2023.” Travel saw a resurgence in 2022 as the pandemic receded and consumers shifted spending away from goods to services and experiences. But Mathivanan said consensus estimates do not yet reflect the magnitude of impact an economic slowdown will have on online travel stocks in 2023 — as consumers grow increasingly wary about spending amid growing recessionary fears. The stocks will also be hurt by less efficient customer service acquisition channels these companies have moved into over the last 12 to 18 months, Mathivanan said. On a more technical basis, the companies’ valuations will feel pressure as outlook estimates are negatively revised. Booking was downgraded to peer perform from outperform because of its high exposure to Europe, which is expected to see a greater macro contraction in 2023. The stock has lost 14.9% so far this year. Airbnb, meanwhile, will not only face macro challenges, but will also struggle with company-specific issues such as outsized growth moderating and an elevated valuation, Wolfe Research. The company will also feel margin pressure as the average daily rate of its rentals declines. The stock, which was down 4.4% on Wednesday, was held at peer perform. It has dropped 44.1% since the start of 2022. Expedia, on the other hand, is considered cheap compared to historical levels, but Mathivanan downgraded the stock to underperform from peer perform because it could suffer from what he calls “sub-par” marketing efficiencies and product mix. Marketing underutilization could also hurt margins, he said. The worst performer of the bunch this year, Expedia has lost 46.4% compared with the start of 2022. It shed 4.3% on Wednesday. Also downgraded to underperform, he said Tripadvisor is seeing its value proposition “erode” as the travel research space grows. Its core auction marketplace and margins could both feel pressure amid a broader slowdown in travel, he said. — CNBC’s Michael Bloom contributed to this report.