America has never needed a Spring Break more than it does right now. An unprecedented series of winter storms and cold have hammered the economy and our national mojo, for want of a better term for the last three months. Nowhere is that easier to quantify than in the airline industry. Since January 1st more than 75,000 flights have been cancelled, by far the highest number of cancellations to start a year since the government started keeping records a quarter of a century ago.
Oddly enough that seems to have been a great thing for companies in the travel industry. Delta (DAL), United Continental Holdings (UAL) and American Airlines (AAL) have scratched more than 68k flights and the stocks of all three companies are at record highs. Disney (DIS) is somehow seeing record attendance at its parks despite the fact that it’s been almost impossible to get there.
No one says it better the JetBlue (JBLU) CEO Dave Barger. "This really, really tough winter has actually driven significant demand."
Of that there's no question but what investors are wondering is whether or not demand for travel related shares are going to stay hot once the weather gets warmer. Todd Schoenberger for one says the answer is yes, because once spring break season winds down, "you have business traveling that is going to be up 6.6% this year alone. You know what that says to me? Convention time. You got the Hyatt (H) you got the Hilton (HLT), you got the Marriott (MAR). They're selling out all these convention halls...and you know what happens when you go to these conferences? You're drinking, you're eating, you're doing all kinds of stuff out there in that lobby and it's all money that goes to the bottom lines of those hotel companies."
The flights, theme parks and resorts are all going to be packed as Americans are going to travel this month come hell or high water. With travel stocks having run so far ahead of the market in anticipation of good news, investors may want to consider using the opportunity to pay for their coming trips by cashing out of their airline shares.