4 Top Travel Stocks To Consider Buying Ahead Of The Summer
For investors currently looking for stocks to buy in the stock market today, travel stocks often come to mind. There are plenty of things that could cause a stock to take off. But with travel stocks, those factors can be similar across the board. For this reason, investors betting on reopening plays amid the ramp-up in vaccination efforts might want to consider tourism stocks.
No doubt, the travel industry took a hit from the coronavirus pandemic. Looking at the ETFMG Travel Tech ETF (NYSE: AWAY), the sector had the sharpest decline of 50% in March 2020. However, some of the top travel stocks have been soaring and are going above their pre-pandemic levels. Yes, the benchmark for the travel sector has improved. But some of the biggest names among the airlines and cruise stocks have yet to see their fundamentals recovering fully.
One thing we can be relatively sure of is, the chances of the biggest names staying down forever are quite remote. In fact, there’s already some momentum building in the industry. Even before the pandemic was ebbing, investors had been flocking back into travel stocks. Many see them as cheap stocks to buy, others simply see them as having great potential due to the pent-up demand. The journey in investing in travel stocks may be a slow one. But for investors with a longer time horizon, some travel stocks are still trading at a steep discount. With all that in mind, do you have a list of the best travel stocks to buy in the stock market now?
Best Travel Stocks To Buy [Or Sell] Right Now
Airbnb Inc. (NASDAQ: ABNB)
Walt Disney Co. (NYSE: DIS)
Carnival Corp (NYSE: CCL)
Southwest Airlines (NYSE: LUV)
First up, newly public vacation rental company Airbnb could arguably be a good travel stock to watch as the economy reopens. The company has already been disrupting the hotel and short-term property rental markets for years. With more individuals now vaccinated and are all excited for summer, the company’s recovery prospects have brightened. The company is also slated to report its earnings on May 13.
Pent-up demand for travel is clearly there and the ongoing vaccinations provide hopes of a speedy reopening. However, some could still be cautious about going to more densely populated areas. This is where Airbnb has an advantage over hotels. Adding to that, Airbnb also offers a more affordable vacation experience which only encourages travelers to use its platform. Airbnb is certainly poised for strong growth when the economy reopens. With that in mind, would you be adding ABNB stock to your portfolio today?
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Among travel-related stocks, Disney has been a standout during the pandemic. Over the past year, the stock has risen by over 70%. For one, investors are increasingly optimistic with DIS stock as the theme parks may reopen sooner than expected with the current vaccination efforts. However, what’s really driving DIS stock was because of its massive success in its streaming business, Disney+. After adapting its massive media portfolio to fit the streaming mold, Disney continues to make it big with homebound consumers. The entertainment giant will be reporting its earnings on May 14 after the market closes.
Disney+’s ability to boast a total global subscriber count of 100 million subscribers is something worth cheering on. Management expects it to boast 230 million to 260 million subscribers by 2024. Now, as travel is expected to come back in full swing, it will provide yet another boost to the company. Considering the continuous growth in its streaming business coupled with the pent-up demand in its physical entertainment business, would you consider DIS stock a top travel stock to buy now?
Coming up next, Carnival is a leisure travel company that has been in the limelight recently. In essence, the company is a cruise company and a provider of vacations to all cruise destinations throughout the world. With many cruise-line companies seeing a remarkably strong booking situation, it should not come as a surprise that investors are bullish on cruise-line stocks. Admittedly, CCL stock may have faced numerous resistance to really take off despite strong bookings. But that could change as things return to normalcy gradually.
Recently, the company announced that its Costa Cruises has unveiled its 2021 cruise vacations in the Mediterranean. It has also been making huge plays ahead of reopening by July. To assure customer safety, the company will include enhanced health and safety procedures for all aspects of its cruise experience. This is crucial because as the world reopens, companies like Carnival must prioritize public health while restoring consumer confidence and driving global economic recovery in the travel and tourism industries.
Carnival also announced that its Seabourn ultra-luxury cruise line has partnered with the government of Barbados to restart guest sailings. Given all these reopening plays by the company, will you consider buying CCL stock?
With air travel demand remaining relatively depressed, Southwest Airlines continues to push forward with its expansion strategy. Since the start of the year, LUV stock has risen by over 35%. Impressively, Southwest Airlines reported first-quarter profit recently, making it the first airline to report quarterly profit since early last year. If anything, this is an extremely positive sign for the industry battered heavily by the insidious coronavirus. The budget airline has been making headlines by announcing new potential markets. That was when its competitors had been cutting down flying routes and frequencies.
Of course, any expansion involves risk. Although the airline may be a discounter, Southwest’s cost structure is somewhat higher than a number of low-cost rivals. Nevertheless, the airline appears to be taking advantage of its balance sheet to capture a larger market share in the U.S. aviation market. And it appears to be working thus far. Now, as Southwest starts to bring back its pilots and flight attendants as travel demand recovers, will LUV stock be an attractive option among the reopening plays?