Travel stocks are off to a strong 2022 start – The Average Joe

    Travel stocks are off to a strong 2022 start

    Victor Lei — Head of Research

    February 16, 2022

    February 16, 2022

    Travel stocks are back — with Airbnb (NASDAQ:ABNB) up 4% after hours from reporting earnings that exceeded expectations yesterday.

    What’s the big deal? In just two years, Airbnb went from weak — taking out $1B in debt to get through COVID — to strong:

    • Reported its second consecutive profitable quarter — with a net income of $55M compared to a loss of $3.9B in the same quarter last year.
    • Raised its sales expectations in the next quarter to $1.48 compared to $1.22B expected and sees bookings to “significantly exceed” 2019’s.

    Airbnb is benefiting from the rise of remote work — with nearly half of their bookings for stays of a week or longer and 20% for a month or more.

    Travel gets a green card: Travel stocks fell alongside the broader market over the past few months — with the emergence of Omicron — but recovered faster than most.

    It’s rare to find an industry in the green in 2022 but we found it…

    • Expedia (NASDAQ:EXPE) — owner of Airbnb competitor VRBO — is up 15%.
    • Bookings (NASDAQ:BKNG) — the travel booking site — is up 7%.
    • Trivago (NASDAQ:TRVG) — a German travel booking site — is up 19%.

    They are finally profitable again with Trivago the only one still trading below its pre-COVID level.

    Outlook: Travel is improving as many North American and European countries remove travel restrictions. Trivago’s CEO expects travel patterns to return to normal by Spring/Summer — as governments and travellers get used to the “new normal”.

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