May 17, 2023
There’s been a huge bump in business travel, up 54% so far this year. Leisure travel is returning to pre-pandemic levels and some travel experts are calling this the “Sold Out Summer” because of the sheer number of vacations being planned. After several long years cooped up, the travel surge is on and for retail shareholders, there are many options to try to capitalize on the trend.
The statistic on business travel is from a survey released by the American Society of Travel Advisors that also found half of Americans ranked a vacation as their No. 1 discretionary spend, and one-third plan to travel abroad this summer. Tourists are returning to the U.S. as well. Data recently released by the National Travel and Tourism Office (NTTO) shows that in March 2023 nearly 20 million people traveled by airplane to the U.S., up 41.7% compared to March 2022, with levels reaching 92.3% of pre-pandemic March 2019 volume.
According to research by Viator, a Tripadvisor (Tii:TRIP) company, travel is close to returning to pre-pandemic levels. As travelers return to pre-pandemic attitudes, they are also getting more comfortable with being among larger crowds again. The growth of categories such as Theme Parks (+263%); Cultural (+228%); and Shows, Concerts & Sports (+108%) validates that travelers are excited to get back out in the world and experience things together.
“Travel is experiencing an unquestionable resurgence despite headwinds faced across the industry. The past 18 months have proven to be a chapter of both resilience and growth for many, including Viator,” said Laurel Greatrix, vice president of brand and communications for Viator. “We’re seeing travelers return to pre-pandemic mindsets in many ways, including an exploding interest in cultural experiences and renewed excitement for travel abroad. Some pandemic-era trends are proving their staying power with outdoor activities continuing to captivate adventure-seekers around the world.”
A resounding 87% of respondents to a Forbes Advisor survey expect to travel at least as much as they did in the prior year, with 49% selecting that they expect to travel more. This is especially true among younger respondents, with 59% of those between the ages of 18 to 26 planning to travel more in 2023. This is impressive considering 45% of respondents traveled once or twice in 2022, with 42% traveling three or more times in 2022.
From an investing perspective, the choices for tapping into this burgeoning market are vast. Retail shareholders can invest in transportation companies, hospitality groups, amusement parks and several other publicly traded companies that support travel.
Travelers heading far from home will probably choose to fly, which could benefit companies like United Airlines Holdings (Tii:UAL), Delta Air Lines (Tii:DAL) and Southwest Airlines (Tii:LUV), to name just a few.
Since research shows travelers are more comfortable with large crowds again, individual investors could see fortunes improve for amusement park companies like The Walt Disney Company (Tii:DIS), Six Flags Entertainment Corporation (Tii:SIX) and Cedar Fair (Tii:FUN).
Hoteliers could benefit from the bump as well. Publicly traded hotel companies include Marriott International (Tii:MAR), Hilton Worldwide Holdings (Tii:HLT), Hyatt Hotels Corp. (Tii:H) and InterContinental Hotels Group (Tii:IHG), to name a few.
Of course, there are companies that help organize your travel as well such as Mondee (Tii:MOND), Expedia Group (Tii:EXPE), Airbnb (Tii:ABNB) and Bluegreen Vacations (Tii:BVH).
Other companies work in the periphery of the travel world, but might be worth studying. They include companies like Camping World (Tii:CWH), Avis Budget Group (Tii:CAR), Winnebago Industries (Tii:WGO) and Pool Corp. (Tii:POOL).
And that’s just the beginning when it comes to investing in the world of travel. Retail shareholders have nearly unlimited options when it comes to capitalizing on the rise in tourism.
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