Travel stocks gained ground following the Democrats' sweep in the midterm elections, as investors are more hopeful about the Iran war ending.
Shares of online travel agencies Expedia and Booking both rose around 12% on Wednesday, while Airbnb, which is considered a competitor, saw its stock gain 7%. Cruise and airline shares were also up by single-digit percentages.
Hotel stocks were roughly flat or up by one or two percentage points.
Over the past year, the conflict in Iran has caused major problems for travel companies. Higher fuel costs have prompted airlines to raise fares and cut capacity. Cruise companies have also struggled to offset higher expenses.
Lower-cost airlines, which have struggled the most to navigate high fuel costs, saw the biggest gains. JetBlue Airways and Frontier rose 7% and 6%, respectively, while United Airlines and Delta Air Lines both advanced around 4%. Shares of all three major public cruise lines rose roughly 3%.
Many companies have also flagged that consumers are spending less on travel because they are pressured by higher prices. Travelers have been staying closer to home and taking shorter trips, Booking executives said on a Tuesday night call with investors.
Some investors also believe that AI development will slow down now that the Democrats have a majority in the House and Senate. This could be good news for travel agencies in the eyes of shareholders, who have been concerned that AI models will eat into the market share of traditional travel booking sites.
