Travel stocks takes a breather – Is there still upside?

Would you give up sex for a year if it meant you could travel right now?

According to Trivago, 40% of Americans would – but data shows it’s still too early. Despite a lack of travel, many travel stocks have surpassed their pre-pandemic share prices. Where will they go from here?

Travel stocks are stuck on a layover

75% of Americans plan to travel more after the pandemic, but that hasn’t shown in company earnings just yet. In the first quarter of 2021:

• Booking.com (NASDAQ:BKNG) and Expedia’s (NASDAQ:EXPE) room bookings are down 48% from the same period in 2019.
• But their stocks tell a different story: In the past year, Expedia’s stock is up 94% and Bookings.com is up 34% – both above pre-pandemic levels.

Reopening stocks had a phenomenal run between last Sept. and March, but have remained flat since then. Which leads us to ask – how much more room do they have to run? According to Jake Fuller of BTIG (via WSJ) – “travel stocks appreciated so much early this year that even strong second-quarter results might not give them a further boost.”

Meaning: With the US emerging out of lockdowns, investors can expect to see strong quarterly sales growth when travel companies report earnings in Aug. But don’t expect a strong response from their stocks.

All dreams, no miles

The stock market also hasn’t been kind to other travel-related stocks since March:

• Airlines: The US Global Jets ETF, a basket of airlines stocks, is up 47% in the past year.
• Hotels: A group of the largest hotel chains including Marriott, Las Vegas Sands and Hilton are up an average 48% in the past year.

And again, stocks in both industries have been mostly flat since March. Does this mean the reopening trade is dead? Not necessarily.

• Over the next year, if we start to see international travel pick back up and travel sales exceeding expectations, travel stocks could climb.
• It also depends where you look. Try finding the stock of your life in unlikely places: online dating…

Investors: Dating over travel

And of course there’s also the 60% that prefers sex over traveling. According to surveys by Evercore ISI, 87% of current users expect to increase their dating app usage over the next year, and 53% plan to start paying for usage.

Dig deeper: Match Group (NASDAQ:MTCH) and Bumble (NASDAQ:BMBL)

Other unlikely places: What does the increased travel mean? More demand for planes from airlines. On June 29, United Airlines placed their biggest aircraft order from Boeing (NYSE:BA) and Airbus.