AAmericans are excited and have no plans to cancel or reschedule their vacations this summer despite rising hotel room rents and airfares. The COVID-19 pandemic had brought the travel and tourism industry to a near standstill for the past two years.
Things are looking better, however, and more and more Americans are planning summer vacations this year. This should finally give a boost to the travel and leisure industry, which has long been struggling to get back on its feet. So are stocks like Marriott International, Inc. TO DAMAGE, Choice Hotels International, Inc. CHH, Malibu Boats Inc. MBUU and Bluegreen Vacations Holding Corporation BVH should benefit from this in the short term.
High costs interfere less with travel plans
The majority of Americans are vaccinated and the government continues to ease restrictions ahead of the summer break. This is all happening as predictions are that more people are traveling and planning this summer vacation.
According to a new report by Deloitte, 46% of Americans plan to stay in hotels or other paid accommodation this summer when they go on vacation. Among those who want to go on vacation, most are young Americans. But many over 55-year-olds who were reluctant to travel until recently because the pandemic is far from over are also making holiday plans.
Interestingly, people are also willing to spend more. Rising costs are a concern, but people don’t seem to mind. According to the survey, three out of ten travelers are even willing to spend more than they did in 2019 or before the pandemic broke out.
A separate survey by CarTrawler.com shows that despite higher air fares and hotel room rates, people are in no mood to give up their vacation plans. According to the poll, 73% of Americans are “positive” about vacationing this summer. That means 73% of people are planning to fly somewhere.
Another survey by World Nomads shows that 41% of Americans say nothing can stop them from going on vacation this summer.
Domestic travel preferred with higher overseas fares
Most polls show that people prefer domestic destinations this time. According to Deloitte, US-based hotels will drive most travel spending this summer, as only 15% of Americans plan to vacation in an international destination.
This is likely due to higher international air fares and unpredictable entry and exit restrictions. Of those traveling within the United States, 67% plan to stay in hotels, while 16% plan other rental stays.
According to CarTrawler.com, 51% of travelers plan to travel domestically.
The COVID-19 pandemic has almost paralyzed the travel and leisure sector as severe restrictions were imposed on travel in the first few months after the outbreak. Although people started vaccinating in early 2021, it took longer for the economy to reopen as multiple variants of the coronavirus affected travel.
Many people were also initially skeptical about traveling despite vaccination because they feared contracting the virus.
However, they are much more confident now and are dying to go on vacation after staying at home for two years. Therefore, higher airfares and room rates no longer matter as people are willing to spend a few bucks more this time.
This would be a good time to invest in stocks that are likely to benefit from the travel boom. We’ve handpicked four such stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks can be found here.
Marriott International, Inc. is a leading global hospitality company focused on accommodation management and franchising following the spin-off of its timeshare business into a public company in November 2011. MAR’s classic premium hotel brands include Marriott Hotels, Sheraton, Delta Hotels, Marriott Executive Apartments, and Marriott Vacation Club. Additionally, distinctive premium hotel brands include Westin, Renaissance, Le Méridien, Autograph Collection, Gaylord Hotels, Tribute Portfolio and Design Hotels.
Marriott International’s expected year-to-date earnings growth rate is 87.2%. The Zacks consensus estimate for the year to date is up 8.2% over the past 60 days. MAR has a Zacks Rank #1.
Choice Hotels International, Inc. is one of the largest hotel franchisors in the world. As of March 31, 2022, CHH had 6,996 hotels open, representing almost 577,714 rooms. Choice Hotels International operates internationally in 40 countries and territories and has a presence in 50 domestic states and the District of Columbia.
Choice Hotels International’s expected earnings growth rate for the year to date is 16.3%. The Zacks consensus estimate for the year to date is up 2.9% over the past 60 days. CHH has a Zacks Rank #2.
Malibu Boats Inc. operates as a designer, manufacturer and marketer of recreational boats primarily in the United States. MBUU sells its boats under two brands: Malibu and Axis Wake Research. Its boats are used for water sports such as water skiing, wakeboarding and wakesurfing, as well as general recreational activities.
Malibu Boats’ expected earnings growth rate for the year to date is 29.6%. The Zacks consensus estimate for the year to date is up 10% over the past 60 days. MBUU carries a Zacks rank #1.
Bluegreen Vacations Holding Corporation operates as a vacation ownership company. BVH markets and sells vacation ownership interests and manages resorts in leisure and urban destinations. Bluegreen Vacations Holding Corporation is based in Fort Lauderdale, FL.
The expected earnings growth rate for Bluegreen Vacations Holding Corporation for the current year is 35.1%. The Zacks consensus estimate for the year to date is up 11.9% over the past 60 days. BVH carries a Zacks rank #2.
The 7 best stocks for the next 30 days
Just Released: Experts distill 7 elite stocks from the latest list of 220 Zacks Rank #1 Strong Buys. They consider these tickers to be “most likely for early market pops.”
Since 1988, the full list has more than doubled the market with an average return of +25.4% per year. So be sure to give these handpicked 7 your immediate attention.
See them now >>
Click here to get this free report
Marriott International, Inc. (MAR): Free Stock Research Report
Choice Hotels International, Inc. (CHH): Free Stock Research Report
Malibu Boats, Inc. (MBUU): Free Stock Research Report
Bluegreen Vacations Holding Corporation (BVH): Free Stock Research Report
To read this article on Zacks.com, click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.