At this point in the global pandemic, we all have the itch to travel again. COVID-19 nearly single-handedly shut down the global travel industry. Not since 2019 have we been able to fly freely to international destinations, and it may not be until 2022 or beyond when we can do so again. Once travel reopens, it could perhaps be the largest demand bubble in history. Where do you want to be invested when this industry reopens?
As investors, we should always be looking ahead to the future. Which trends can we foresee happening? What sectors or industries are ready to rise higher? Predicting these events before they happen is how great investors separate themselves from the good ones. We’re months or even a year out from global travel reopening. The one thing we do know is that it will reopen one day. That looks like a trend we can predict.
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Table of Contents
List of Travel Stocks
| Symbol | Name |
|---|---|
| CCL | Carnival Corp |
| LUV | Southwest Airlines |
| BA | Boeing |
| ABNB | Airbnb |
| DUOL | Duolingo |
| MA | Mastercard |
| V | Visa |
Trends of Travel Stocks
The travel industry was hammered during the pandemic, with some stocks hitting multi-year lows. These companies directly depend on people traveling and will most likely be the first stocks to rebound when restrictions are lifted. I understand that many investors steer clear of cyclical sectors like travel.
These industries typically don’t provide the highest returns or exponential growth that other growth sectors do. But let’s say we know that travel will return to normal in a year. There is an excellent chance that these companies will give investors positive returns over that period.
Cruise Stocks
- Carnival Corp (NYSE: CCL)
- Norwegian Cruise Lines (NYSE: NCLH)
- Royal Caribbean Cruises (NYSE: RCL)
These are three of the largest publicly traded cruise line stocks. And I think they have a higher chance of returning to normal than air travel shortly. Domestic cruises within the United States have already reopened! There most likely will not be a return to regular international cruises for some time, especially given that there have already been some COVID outbreaks on ships.
Health protocols will be strict, but cruise ships hitting the seas is one of the first signs that this pandemic will hopefully close.
People love to cruise. It’ll never go away. Therefore, these will make great travel stocks, especially as things return to normal. It’ll have people rushing to go on vacation.
And we’ll all need a vacation after everything that’s happened. What does that mean for these travel stocks to buy? Only time will tell.
But people aren’t going to want to sit at home forever.
Airline Stocks
1. Southwest Airlines (NYSE: LUV)
I like Southwest the most of all the domestic U.S. airlines that trade on the stock market. In my opinion, Southwest has always operated more efficiently than its other airline siblings.
It carries a lower level of debt and has a higher operating margin. Without going into details, Southwest has one of the lowest profitability thresholds per flight.
This means that even if a flight is not 100% booked, the company still turns a nice profit for each scheduled flight. Like cruise lines, domestic air travel has opened up faster than international air travel.
The U.S. has seen a rapid surge in domestic air travel numbers, which is largely anticipated to normalize by 2022. Southwest is a company that has a high upside from here and may even reintroduce its quarterly dividend as early as this September.
2. Boeing (NYSE: B.A.)
You can’t have flights without airplanes! A near-global duopoly exists between Boeing and Airbus (EPA: AIR), which trades on the Paris Stock Exchange. Talk about a company that has had a rough few years. Boeing has been mired in controversy surrounding its Boeing 737 Max airplanes, which have been involved in several crashes. The FAA even grounded all 737 Max planes until they conducted an investigation and forced Boeing to prove they could fly once again. The good news for Boeing investors is that the company has seen many orders from airlines like Southwest Airlines and United Airlines (NASDAQ: UAL), amongst others. Airline companies are loading up on new planes and preparing themselves. Investors can do the same by loading up on shares of Boeing.
Hotel and Resort Stocks
1. Marriott (NASDAQ: MAR)
Marriott is the largest hotel chain in the world by the total number of available rooms. The stock hit rock bottom in 2020, as nearly all its locations saw a steep decline in business. Marriott took a major hit to its revenues and was widely affected by the closing of ancillary travel like business travel, corporate events, and weddings. The stock has already rebounded as countries like China have already exhibited a strong return to Marriott’s properties. There is still room for upside, though, and a reopening of global travel should push the stock to new all-time highs.
2. Wynn (NASDAQ: WYNN)
This is a more specific play on domestic U.S. travel opening up. Las Vegas has been one of the most popular destinations for Americans stuck at home for the last two years. Although visitors to Nevada are surging, Wynn’s stock price remains relatively flat. It is still down 17.40% year to date and is only up around 1.74% over the past 52 weeks. The stock was trading at over $143.00 per share at the beginning of 2020 and is currently trading for around $88.00 after falling below $50.00 during the height of the pandemic. Wynn is another nice short-term play that can net a nice profit over the next year.
Other Travel Related Stocks
1. Moderna (NASDAQ: MRNA)
Moderna has been an absolute stock monster this year. Shares are up 242% this year and nearly 500% over the past 52 weeks. Why should we consider them as travel stocks to buy?
As more countries purchase its vaccine doses, Moderna investors are eyeing this company as a long-term investment. No matter where you stand on the vaccine argument, they will play a big role in reopening global travel.
Even if the domestic laws don’t require a vaccine, other countries might have their own laws for travelers. Moderna investors have to be ecstatic with the growth of the stock. A
If booster shots and additional vaccines are required in the future, Moderna could see even more growth for its bottom line.
2. Airbnb (NASDAQ: ABNB)
If you are like me, you love staying in Airbnb when you travel. They are often centrally located in neighborhoods where locals frequent and can be much more affordable than a high-end hotel.
Airbnb has been flat since its IPO back in December of 2020. The stock hit as high as $220.00 per share in February but has steadily declined. Stocks often go through high volatility after their IPOs and then undergo longer periods of consolidation. Airbnb stock is a ticking time bomb.
Once global travel reopens fully, I can see this stock skyrocketing well past its previous all-time highs. We love travel stocks to buy that’ll give us great returns.
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Language and Payment Methods
1. Duolingo (NASDAQ: DUOL)
Duolingo was a high-profile recent IPO when it debuted on Wall Street at the end of July. The stock has fallen since trading at around $140 per share.
The company has some high-profile backers, including Google, and the app has previously won the Apple’s App of the Year Award.
You can learn over 40 languages on the app, with over 500 million downloads from the Apple and Google stores, making it the most popular educational app. Currently,
Duolingo has over 40 million monthly active users and offers a premium version of its app for only $6.99. Full disclosure: I am a Duolingo user but not a shareholder. There is no better app for learning a new language, which you can do at a leisurely or faster pace.
2. Mastercard (NYSE: MA) and Visa (NYSE: V)
I am as big of a fintech investing fan as there is, but nothing beats your reliable credit card when paying for a vacation.
Visa and Mastercard are the clear global leaders in credit cards. Both companies reported major losses over the past year from a lack of cross-border payments that usually accompanies global travel.
I believe credit card transactions are about to go through the roof. Not only is extra stimulus money floating around for domestic shopping but once travel opens up, people have been saving for nearly two years to spend on their vacations.
If you believe that travel and retail shopping are due for a surge, Visa and Mastercard are better stocks to add to your portfolio.
Travel stocks to buy aren’t just airlines and cruise companies. That means you’ve got great options. And the more options you have, the more trades you can place.
Just remember not to trade over. Make sure you’re buying travel stocks with the best setups.
Final Thoughts: Travel Stocks to Buy
I am itching to travel just from writing this article, and I cannot wait until we can travel freely once again. The COVID-19 pandemic has been hard on everyone, especially the businesses that rely on industries that were shut down. We know that global travel will return one day soon, but what it will look like remains a mystery.
As investors, it’s important to keep our fingers on the pulse of global events. Targeting travel stocks to buy and stocks that will rise in sympathy, like vaccines and technology, gives us exposure to the reopening. The travel demand will be at an all-time high, so let’s hope these stocks are, too!
