• 1.59K
  • Comment
  • Favorite

The Pandemic May Have Changed Vacations – And Travel Stocks Like Airbnb, Marriott, Winnebago – Forever

Investors2021-05-28

Your next vacation will likely be more private, luxurious or family oriented than your trips in the past, and business trips may never be the same. For leisure and travel stocks like Airbnb that got slammed by pandemic shutdowns, the lifting of Covid curbs means adjusting to a whole new world.

Some tastes people acquired last year as they looked for escapes from lockdown are proving durable, like traveling to national parks by RV. Others, such as boating, grew out of surges in wealth that the stock market rally provided. As the summer travel season heats up, Americans are making new choices in where they go, when they go, how they get there and who joins them.

"The world is never going back to the way it was," said Airbnb CEO Brian Chesky on an earnings call in May. "And that means that travel is never going back to the way it was either."

One major trend is travelers have become more flexible about when and where they go, especially as remote work allows people to blur when they are on and off the clock. Airbnb stock rose May 24, when the company updated booking features, including an option to search for listings without fixed dates or locations.

And consumers aren't the only ones changing their habits. While tourism-dependent destinations suffered last year, the less-packed streets also showed locals the benefits of quieter communities.

Residents and local officials in normally packed hot spots like Italy and Hawaii are considering limiting the number of tourists. Such a seismic change could make visiting these places prohibitively expensive for many people. If the mix of travelers tilts more heavily toward the wealthy, travel stocks will nudge further toward luxury.

Leisure, Travel Industry Stocks

Shares across the sector have rebounded from last year's pandemic lows. The stocks' recent chart action is mixed. But many travel stocks have outperformed the market the past week and could present buying opportunities for investors.

Airline stocks like American Airlines, United Airlines and Delta Air Lines surged earlier this year on the Reddit stock short squeeze. Then they sold off because business and overseas travel remained weak. Since then, they've consolidated and are approaching buy points.

Cruise stocks like Carnival, Royal Caribbean and Norwegian Cruise Line are showing similar patterns.

Meanwhile, shares of boat makers MarineMax and Brunswick as well as RV makers Winnebago and Thor Industries need to regroup after some failed breakouts. They are no longer in buy zones but could form new bases if earnings and sales growth remain strong.

Hotel leader Marriott has been less volatile and is forming a base, though earnings and sales have yet to fully recover.

Airbnb stock has had a more difficult year. It surged after going public in December but began to slump in March as competition from Expedia rival Vrbo rental service reduced the availability of hosts. A mixed Q1 earnings report and the end of a post-IPO lockup period also weighed on Airbnb stock, which popped up 6% Thursday on higher volume but remained 35% off its 2021 high.

When Luxury Means More Privacy

Luxury travel, once the purview of only the ultrarich, may have won over those who might have had the means but not the need to travel lavishly. As travelers sought to avoid crowds during the pandemic, those with the means turned to options like private jets.

Arnie Weissman, editor-in-chief of Travel Weekly, says the pandemic opened luxury travel to a wider customer base. "Some people developed a taste for it, and it's likely to continue."

Kim-Marie Evans, who writes the blog "Luxury Travel Moms" and plans travel for high-net-worth clients, told IBD she booked a trip for a family to Anguilla.

They stayed in a four-bedroom villa at the Four Seasons. And rather than flying commercially, they used a private jet service.

Private jet bookings are at or near their pre-pandemic highs, according to Elite Traveler, citing industry tracker FlightAware's data.

In May, private jet company Wheels Up said membership jumped 58% in Q1 to nearly 10,000. And VistaJet, another leading private jet company, said membership climbed 29% from a year ago.

Private jet leasing company NetJets, which is owned by Berkshire Hathaway, says its flight volume dropped to as low as 10% of 2019 numbers at the start of the pandemic.

Now the company, which also offers fractional ownership of its jets, says it's operating at 85% of its 2019 volume. NetJets said in a statement that commercial airlines have reduced their schedules. Consumers also are prioritizing their health and safety, choosing the seclusion of a private jet over a packed jetliner.

Vacation Shift Favors These Travel Stocks

Hotel chains implemented stringent Covid-19 protocols to convince visitors their properties were clean and safe. Still, many travelers opted to rent private homes through Airbnb, where they could avoid mingling with strangers in hotel lobbies, Weismann says.

Travel trends favor Airbnb stock long term, though it currently is slumping. On May 27, analysts at RBC Capital Markets rated shares at outperform, citing secular tailwinds that have yet to be fully appreciated by the market such as its dominant customer engagement.

The pandemic also shed light on the market potential of travel stocks like Marriott, which operates home-rental service Homes & Villas by Marriott International, catering to ultra premium short- and long-term stays, CFRA Research analyst Tuna Amobi says.

The Homes & Villas platform, which offers professionally managed private homes, had around 2,000 units at launch less than two years ago. Today, it lists nearly 25,000 properties.

"They're where we don't have hotels, and many of them are in more remote locations, which really was quite attractive during Covid," said Marriott International President Stephanie Linnartz in a recent call with investors.

Airbnb also finds that customers are visiting smaller cities, towns and rural communities — not the same 20-30 cities that were most popular pre-pandemic. People are traveling outside the peak seasons and staying longer.

"There is a mass shift from mass travel to meaningful travel," CEO Chesky said.

Seaworthy Travel Stocks

Luxury cruising should also come back with a bang. Nearly every cruise line's around-the-world luxury voyage is fully booked two years in advance.

One cruise line, Silversea, said its 139-day around-the-world cruise sold out in a single day. The Monaco-based cruise line is owned by Royal Caribbean. The cruise costs between $74,000 and $278,000 per guest, based on double occupancy. That compares with typical fares that start at $15,000-$20,000.

But others heading out to sea want to avoid crowded ships, which have seen outbreaks of coronavirus and other infections. The National Marine Manufacturers Association says new powerboat sales surged 34% in February compared to the same time period last year.

"Inventory levels of new boats are the leanest they've ever been, and boats are being sold as soon as they hit the marketplace as manufacturers work to fulfill the backlog of orders," said Vicky Yu, senior director of business intelligence for NMMA. "While new boat sales slowed in early 2021 following record sales last year, we are still seeing elevated levels as more Americans seek out boating as a way to spend quality time with loved ones."

The trend has pushed up leisure and travel stocks like boat retailers MarineMax and Brunswick as well as sport boat maker Malibu Boats.

"It's really turning out to be a great alternative for people to stay close to home and with their family and friends and enjoy the boating lifestyle," MarineMax CFO Michael McLamb said in a conference call after reporting earnings April 22.

Travel Stocks For Being Alone Together

The desire to spend more time with friends and family is also spurring RV sales. They exploded in popularity during the pandemic, and sales data this year show demand remains high.

"The rediscovery of America will continue this summer," Weissman said.

The pandemic accelerated long-term trends favoring the outdoors, Winnebago CEO Michael Happe said in a March earnings call. That includes power sports, boating and RVs.

Consumer priorities have changed, he added, toward a desire to invest in experiences vs. possessions.

"We also believe the time (spent) recently with family and friends has reinforced that they'd like to do more of that in the future," Happe said. "And families and individuals will be reevaluating how they spend their leisure time going forward."

Airbnb pointed to another sign of this trend among leisure and travel stocks. Instead of booking studio apartments in cities, more customers are booking entire homes with more bedrooms. As a result, the number of guests per reservation has increased.

Work-Life Rebalance

As people pay closer attention to their well-being post-Covid, another trend to watch is high-end wellness tourism with a focus on fitness, rejuvenation and health, Weissman says. That includes yoga and spa getaways as well as packages that offer cycling and hiking activities.

Meanwhile, the work-from-home shift allowed people to rethink other aspects of their lifestyle. In particular, they can try to balance work, leisure and travel differently.

Wedbush analyst James Hardiman says "2020 was proof of concept that people can be productive, even more productive, while working remotely."

Airbnb says the share of bookings longer than 28 days jumped to 24% in Q1 from 14% in 2019. The company doesn't consider this travel.

"People are not just traveling on Airbnb," Chesky said. "They're now living on Airbnb."

Future Of Business Travel?

That also has implications for business travel, which is the most lucrative segment for travel stocks like airlines.

Experts say fewer workers may fly for one-day intracompany meetings. However, more crucial business will still require people to fly for in-person meetings.

When it's time to show up in person, Airbnb expects workers will travel together more often. That trend also has ramifications for Airbnb stock and others. Employees who work in different cities might stay in one house when they visit headquarters. They could share meals together at the kitchen table in the morning or evening.

That may be a welcome change for road warriors, who pop in an out of cities and squeeze in sightseeing along the way.

"They don't miss business travel," Chesky said. "They don't miss standing in line in front of a museum or a landmark … getting a photo with a selfie stick."

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Report

Comment

  • J999
    ·2021-06-02
    Permanent change
    Reply
    Report
  • VictorTan
    ·2021-05-31
    ??
    Reply
    Report
  • VictorTan
    ·2021-05-31
    Omg
    Reply
    Report
  • Felk
    ·2021-05-31
    Interesting insights in the shift in consumer travel. 
    Reply
    Report
  • ongcjeric
    ·2021-05-31
    Pls comment
    Reply
    Report
    Fold Replies
    • TeckLeong
      Commented, Pls comment and like back
      2021-05-31
      Reply
      Report
  • Kevin92
    ·2021-05-31
    Like And comment
    Reply
    Report
    Fold Replies
  • Racheltestin
    ·2021-05-31
    Like and comment thanks 
    Reply
    Report
    Fold Replies
    • YWC
      Hi
      2021-05-31
      Reply
      Report
    • Kevin92
      Like And comment
      2021-05-31
      Reply
      Report
  • CharlesKing
    ·2021-05-31
    Like and comment plz???
    Reply
    Report
    Fold Replies
    • Racheltestin
      Comment back pls thanks
      2021-05-31
      Reply
      Report
  • HengKuan
    ·2021-05-31
    Like
    Reply
    Report
    Fold Replies
    • HengKuan
      like
      2021-06-02
      Reply
      Report
  • PaladinSir
    ·2021-05-31
    Like and comment me pls 
    Reply
    Report
    Fold Replies
    • chubzchubx
      reply plz
      2021-05-31
      Reply
      Report
    • Jeremylok
      Pls comment on my comment
      2021-05-31
      Reply
      Report
  • GoldD
    ·2021-05-31
    Please comment and like ?
    Reply
    Report
    Fold Replies
    • Vincewjs
      done
      2021-05-31
      Reply
      Report
  • YJ1911
    ·2021-05-31
    Pls help like!
    Reply
    Report
    Fold Replies
    • Gaga71
      LooKout for TripAdvisor
      2021-05-31
      Reply
      Report
    • JACE
      Done
      2021-05-31
      Reply
      Report
    • GoldD
      Please comment and like ?
      2021-05-31
      Reply
      Report
  • 我是流动的水
    ·2021-05-31
    Hi
    Reply
    Report
    Fold Replies
    • chubzchubxReplying toGoldD
      reply plz
      2021-05-31
      Reply
      Report
    • JACE
      Hi
      2021-05-31
      Reply
      Report
    • GoldD
      Please comment and like ?
      2021-05-31
      Reply
      Report
  • Phantom121
    ·2021-05-31
    Damn!
    Reply
    Report
  • RC_ADRIC
    ·2021-05-31
    Like and foment 
    Reply
    Report
    Fold Replies
    • hoa
      done
      2021-05-31
      Reply
      Report
    • PTKH
      Pls response
      2021-05-31
      Reply
      Report
    • RC_ADRIC
      Done
      2021-05-31
      Reply
      Report
  • Horsepeter
    ·2021-05-31
    Pls like and comment 
    Reply
    Report
    Fold Replies
    • PTKH
      Pls Reply
      2021-05-31
      Reply
      Report
    • RC_ADRIC
      Like and comMent
      2021-05-31
      Reply
      Report
  • andrew123
    ·2021-05-31
    It depend on when can things go back to normal. If this pandemic is not going away in the next few yrs , than only those co with deep pocket can survive. 
    Reply
    Report
  • NicNg
    ·2021-05-31
    Please like and comment thanks
    Reply
    Report
    Fold Replies
    • _J_R_Replying toHMH
      Done
      2021-05-31
      Reply
      Report
    • _J_R_
      Pls comment back
      2021-05-31
      Reply
      Report
    • HMH
      Please respond to comment
      2021-05-31
      Reply
      Report
  • Chris1368
    ·2021-05-31
    Read
    Reply
    Report
  • Sam51
    ·2021-05-31
    Ohhh
    Reply
    Report
    Fold Replies
 
 
 
 

Most Discussed

 
 
 
 
 

7x24

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Company: TTMF Limited. Tech supported by Xiangshang Yixin.

Email:uservice@ttm.financial