Investing.com -- Travel demand has remained surprisingly firm through the first quarter despite geopolitical risks from the Middle East conflict, according to a note from Bernstein analyst Richard Clarke.

Clarke told investors that travel activity “seems to be holding up well in Q1,” with U.S. hotel performance showing a clear acceleration.

Clarke notes that U.S. revenue per available room “inflected in February to 4.3% growth, the fastest in >1 year,” adding that performance has “stayed strong through March.”

He says China and Asia-Pacific “also had a strong February,” while Europe “has held steady.”

Although the Middle East weakened in March as expected, Bernstein highlights that it is “a small region for most hotel groups.”

Online travel agencies are also said to be seeing resilient trends. Bernstein writes that app and web traffic checks point to OTA volume growth in the high single digits to low double-digits area, even as March demand decelerated for longer-lead platforms such as VRBO and Airbnb.

The firm expects any cancellation-related drag to be a sub-0.5% impact. Clarke adds that “Expedia looks particularly strong and should lead on growth in 1Q.”

AI-driven referral traffic, meanwhile, is having little impact. Bernstein reports that such referrals make up “<0.5% of total traffic,” and traffic directed by AI has been declining since last year.

On hotels, Clarke says February’s U.S. strength “sets up the hotel companies to comfortably deliver within or beyond their guidance in Q1.”

Still, he cautions that rising oil prices and regional uncertainty “threaten to derail” an early-year rebound in the global hotel pipeline.