These 4 Travel Stocks Depend on Holiday Spending
Hotels, a booking app, rented cabins, and cruise ships: Here's how each of these four travel stocks makes money when families leave home for the holidays.
As families travel for the holidays, four travel stocks stand to benefit from holiday spending: Marriott, Booking Holdings, Airbnb, and Carnival. These companies cater to different aspects of travel, from hotel rooms to booking platforms and cruises.
Marriott International, through its various brands, collects fees from hotel owners, meaning revenue increases with more bookings and higher room rates. In the third quarter, Marriott's revenue per available room (RevPAR) increased 6.5% globally and 7.4% in the U.S. and Canada, leading the management to raise its full-year forecast and anticipate a 4.5% to 5% growth in RevPAR for the fourth quarter.
Booking Holdings owns multiple travel-related websites, including Booking.com, Priceline, Agoda, Kayak, and OpenTable. The company reported a 7% increase in room nights and a 10% rise in gross bookings, totaling $54.5 billion. However, demand for international trips has slowed, particularly due to conflicts in the Middle East and unrest in some European cities. Despite this, Booking expects domestic travel to remain strong, and its shares have dropped approximately 25% this year.
Airbnb specializes in accommodations for holiday gatherings, such as houses with large kitchens for families. In the third quarter, the number of nights and seats booked increased by 16%, and revenue rose 19% to $4.9 billion. Airbnb's "reserve now, pay later" feature allows guests to lock in stays without an upfront payment, making it an attractive option for family trips. Searches for Christmas-to-New Year's stays in small mountain towns near big cities have jumped by 37% in areas like Hunter, New York, in the Catskills.
Carnival is the cruise line that benefits from holiday season planning. Customer deposits for cruises have reached a record high of $7.6 billion, up about 7%, even though Carnival is not adding capacity. About half of Carnival's sailings in the first quarter, which runs from December to February, will head to the Caribbean. The company's private island destinations, such as Celebration Key in the Bahamas, have welcomed almost 2.5 million guests in their first year.
However, higher fuel prices have negatively impacted Carnival's profit outlook, reducing it by about $150 million this year.
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