In this piece, we will take a look at ten travel stocks billionaires are loading up on. If you want to skip our analysis of the recent events in the travel industry, then take a look at 5 Travel Stocks Billionaires Are Loading Up On.
The travel industry has seen disruption in one form or the other over the past four years, and a tough economic environment after the coronavirus pandemic has hampered recovery. Some sectors, such as airlines that were forced to fly routes just to keep them running and cruise companies that saw ships stranded at ports, faced crises that perhaps few would believe were possible before they happened.
Like the broader economy, such as industrial production and logistics, the global benchmark crude oil prices determine the ease of the cost of doing business for travel companies as well. These prices have been fluctuating since the start of 2022 and after a respite earlier this year as oil investors remained optimistic about sufficient demand for their products, the latter half of 2023 is seeing oil prices soar again. A big reason behind the high oil prices is the need for oil producing countries to balance their budgets as demand expectations from China start to wither down. The world's second largest economy in nominal terms and the biggest in purchasing power parity is dealing with a set of problems that are worrying investors.
The travel industry depends on discretionary income, and recent trends indicate that consumers might start having less of this since gas prices in America have risen. To understand the impact that all these events have made, consider the story of Expedia Group, Inc. (NASDAQ:EXPE). Ever since inflation started to rise in early 2022, Expedia's shares started on a downward run. These troubles are also visible when looking at the stock of Airbnb, Inc. (NASDAQ:ABNB). While the stock has still performed better than Expedia, the shares nevertheless have posted a 4.72% gain over the past five years. During the same time period, the S&P 500 is up by a strong 53%, gains that outpace the return offered by major airlines such as Delta Air Lines, Inc. (NYSE:DAL) (down 29.54%) and American Airlines Group Inc. (NASDAQ:AAL) (down 64.82%).
The turmoil faced by the airlines and the hospitality firms is nothing when we take a look at cruise ship operators. Shares of Royal Caribbean Cruises Ltd. (NYSE:RCL) still haven't recovered from the coronavirus-induced sell off, and are down 24.7% over the past five years. However, if you think this is bad, then you'd be glad you hadn't bought Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) in 2020 since its stock is down by a stunning 70% over the past five years. We've covered the shock to the cruise ship industry in detail as part of our coverage of 10 Best Cruise Stocks To Buy Now so check it out if you want to see just how bad things were for the companies, their employees, and the travelers stuck on vessels.
Yet, even though the travel industry is down, it doesn't mean it's dusted for. The global economy should recover at some point in time, even as China struggles to move to pre-coronavirus levels and Europe - led by Germany - struggles to find economic stability. International tourism is expected to touch 95% of pre-pandemic levels this year, and Europe is one of the regions that is leading the recovery. Data from the United Nations' World Tourism Organization (WTO) shows that while international tourism had recovered to 65% of pre pandemic levels in 2022, the European sector had recovered to 80% and Western Europe to 87%.
This recovery is also affecting the ticket prices between Europe and the U.S. Combined with high fuel prices, airlines and other firms have to scale up their operations as product demand increases. This scaling costs money, which is why prices go up during periods of high demand. As to what the situation in the industry was as the second half of 2023 kicked off, here's what the management of American Express Company (NYSE:AXP) had to say during the firm's second quarter of 2023 earnings call:
We continue to see strong growth in Travel and Entertainment spending, which increased by double-digits in the quarter and remains strong across customer categories and geographies. Q2 was a record quarter for restaurant reservations through our Resy platform and bookings through our consumer travel business reached their highest levels since before the pandemic.
. . . And look, I mean, just look at consumer, right? I mean consumer in the U.S. is up at 10%. T&E is still very, very strong. We talked about travel bookings, travel bookings more than one month out are higher than they’ve been pre-pandemic. They are higher than they were at this time last year. They were higher than they were, obviously, in 2019. International is really coming back strong for us. And as we said, it’s a fastest growing part of our business. And the other thing I’ll point out is you just had — you had a little hangover of noise from Omicron in this quarter because last year, you had a little bit of spending that was pushed from the first quarter to the second quarter. And if you look at — if you go back and look sequentially last year was a huge increase sequentially quarter-over-quarter.
So, with these details in mind, we decided to take a look at which travel stocks billionaires are buying. Some top stock picks are Expedia Group, Inc. (NASDAQ:EXPE), Airbnb, Inc. (NASDAQ:ABNB), and Booking Holdings Inc. (NASDAQ:BKNG).
Photo by Artur Voznenko on Unsplash
To compile our list of travel stocks being bought by billionaires, we first compiled a list of the largest companies categorized as travel services by Yahoo Finance. Then, the number of billionaires that had bought their shares during Q1 2023 was determined through Insider Monkey's research, and for updated coverage, the number of hedge funds that had bought their shares as of Q2 2023 is also provided. The stocks are listed according to the number of hedge fund investors since this is the more up to date data set.
10 Travel Stocks Billionaires Are Loading Up On
10. Sabre Corporation (NASDAQ:SABR)
Number of Billionaire Investors: 8
Number of Hedge Fund Investors: 28
Sabre Corporation (NASDAQ:SABR) is a technology company that allows business travelers to plan their trips and hotels to manage their operations. Its stock is down 18% year to date and analysts have rated the shares as Hold on average.
During this year's first quarter, eight billionaires had bought Sabre Corporation (NASDAQ:SABR)'s shares and in the next quarter, 28 out of the 910 hedge funds part of Insider Monkey's database were shareholders. Out of these, the company's largest investor is Terry Smith's Fundsmith LLP since it owns 22 million shares that are worth $72 million.
Along with Airbnb, Inc. (NASDAQ:ABNB), Expedia Group, Inc. (NASDAQ:EXPE), and Booking Holdings Inc. (NASDAQ:BKNG), Sabre Corporation (NASDAQ:SABR is a travel stock that billionaires are loading up on.
9. Travel + Leisure Co. (NYSE:TNL)
Number of Billionaire Investors: 10
Number of Hedge Fund Investors: 33
Travel + Leisure Co. (NYSE:TNL) operates travel businesses and runs other operations. The firm's second quarter earnings results show that revenue and operating income dropped by 5% and 3% respectively. The stock also has a strong 4.59% dividend yield due to its 45 cent dividend.
By the end of 2023's second quarter, 33 hedge funds out of the 910 that were surveyed by Insider Monkey had invested in Travel + Leisure Co. (NYSE:TNL)
8. Tripadvisor, Inc. (NASDAQ:TRIP)
Number of Billionaire Investors: 9
Number of Hedge Fund Investors: 33
Tripadvisor, Inc. (NASDAQ:TRIP) enables travelers to plan and execute their itineraries. Like other travel companies, its shares are also down by 14% year to date, and the second quarter didn't help either since core revenue struggled.
After sifting through 910 hedge funds for their Q2 2023 shareholdings, Insider Monkey discovered that 33 had held a stake in the company. Tripadvisor, Inc. (NASDAQ:TRIP)'s biggest hedge fund shareholder is Paul Reeder and Edward Shapiro's PAR Capital Management due to its $89 million investment.
7. Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH)
Number of Billionaire Investors: 7
Number of Hedge Fund Investors: 35
The first cruise company stock on our list, Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH), is up by 37% year to date but down by a whopping 70% over the past five years. The stock tanked in January 2020 and as is evident, it still hasn't recovered.
As of June 2023, 35 out of the 910 hedge funds profiled by Insider Monkey were Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) investors. John W. Rogers' Ariel Investments is the firm's biggest stakeholder, through a stake worth $144 million.
6. Carnival Corporation & plc (NYSE:CCL)
Number of Billionaire Investors: 7
Number of Hedge Fund Investors: 40
Carnival Corporation & plc (NYSE:CCL) is one of the biggest cruise companies in the world with close to a hundred ships in its fleet. Its stock has done rather well this year, as the shares have gained 91% year to date. However, insiders have sold more than $1 million of shares over the past year or so, in a worrying development.
Insider Monkey dug through 910 hedge funds for their second quarter of 2023 shareholdings and discovered that 40 had bought Carnival Corporation & plc (NYSE:CCL)'s shares. Out of these, the largest shareholder is Josh Overdeck and David Siegel's Two Sigma Advisors since it owns $192 million of shares.
Expedia Group, Inc. (NASDAQ:EXPE), Carnival Corporation & plc (NYSE:CCL), Airbnb, Inc. (NASDAQ:ABNB), and Booking Holdings Inc. (NASDAQ:BKNG) are some top travel stocks billionaires are buying.
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Disclosure: None. 10 Travel Stocks Billionaires Are Loading Up On in 2023 in 2023 is originally published on Insider Monkey.