The travel and leisure scene could provide momentum heading into the summer travel season.
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With the summer travel season fast approaching, some investors may be thinking that now is a good time to take a look at the many travel and leisure stocks that are overdue a boost. While the summer travel season may bring a much-needed boost, the increased travel demand will not magically erase the various headwinds consumers face. Inflation, while slowing, is still a bit too high. The effects of last year's inflation could hurt for a long time.
Either way, here are three travel stocks to keep an eye on to make the most of the strong seasonal times. I see a path to greater heights for the company as they invest wisely in technology while cutting various expenses, but now that we have officially passed the halfway point of Q2 2024. Some companies seem too cheap.
Airbnb (ABNB)
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In my opinion, Airbnb (NASDAQ:ABNB)'s stock price has come under pressure after management issued rather lackluster guidance after a promising quarter.
Summer travel could fuel hot travel demand and set the stage for a bigger-than-expected beat, but Airbnb is reportedly listening to feedback from customers tired of the added costs. Sure, it can be a frustrating experience to book accommodation and have hefty fees added on. Specifically, customers are fed up with additional cleaning fees.
Given these prices, booking a stay on Airbnb may not be significantly cheaper than booking a hotel or motel room. In any case, I think some of the room reservations on Airbnb are novel and unique, so it will continue to work in your favor.
Additionally, technology can help reduce costs for customers without impacting operating margins. Using AI to address guest-host disputes is just one way technology can help Airbnb deliver higher customer satisfaction at lower prices. AI-powered concierges offer another path to growth and profitability.
Booking Holdings (BKNG)
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Reservation held (Nasdaq:back)'s stock price has soared, with shares up more than 43% in the past year. The travel agency just reported higher-than-expected first-quarter sales and profits. One reason stocks are starting to rise ahead of the summer travel season is the increase in the number of travelers. As summer approaches, I suspect the recent momentum will continue.
Although consumers are feeling the pinch, many seem to want to continue spending at a leisurely pace. In fact, the emphasis on experiential elements (especially among younger consumers) may be the reason why Booking has been so incredibly resilient. In any case, strategic betting on bookings (think AI personalization) also adds to the long-term bullish narrative.
Even at near all-time highs, and trading at a price-to-earnings ratio of 28.6, I still like the stock.
Hilton Worldwide Holdings (HLT)
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Hilton world wide holdings (New York Stock Exchange:HLT) Stock is a major hotel chain and can benefit from the hot travel season. The stock price has risen steadily by about 44% over the past year. Like Booking, Hilton also had a very impressive first quarter, beating analyst revenue expectations. Additionally, the company raised its full-year outlook, prompting a sharp rise in its stock price.
With Hilton Honors' superior loyalty program driving impressive booking numbers, HLT stock appears to be one of the best destinations for investors looking to capitalize on the summer travel boom. is.
At the time of writing, HLT stock has a P/E ratio of 44.5x. It's not a cheap stock. However, given its strong loyalty program and pipeline of luxury hotels, we see many factors that justify the premium price.
On the date of publication, Joey Frenette did not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer and are influenced by InvestorPlace.com. Publishing guidelines.
