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Travel Space Holds Upside Potential for 2021: 3 Stocks in Focus

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In 2020, the global travel industry remained disrupted by the ongoing coronavirus pandemic. The industry was hugely impacted during the “great lockdown” period with airplanes on the ground, hotels closed and travel restrictions.

However, the industry is now on the recovery path, thanks to the reopening of the economies across the world. This remains a major positive for the travel booking services companies.

Further, a controlled number of COVID-19 cases in several countries, with improvement in medical infrastructure and positive developments in the treatment of this infectious disease, are creating optimism in the travel space.

People are gradually coming out of their fear of travel. Signs of latent demand for travel can be seen.

Online travel companies like Expedia (EXPE - Free Report) , Booking Holdings (BKNG - Free Report) , TripAdvisor (TRIP - Free Report) and MakeMyTrip (MMYT - Free Report) are experiencing improvement in their performance and bookings.

Most importantly, strong expectations related to the widespread availability of COVID-19 vaccine next year has created an upside potential in the travel industry. Positive results from the vaccine trials are boosting the confidence level of travelers.

Hence, the above-mentioned stocks are likely to rebound quickly in the “post-vaccine world”.

Upswing in Numbers

According to a survey conducted by World Travel & Tourism Council (“WTTC”), 99 percent travelers in the United States and Canada have shown interest in travelling again.

Another survey conducted by Travel Leaders Group with WTTC shows that 70% of the respondents are planning to take a holiday. Further, 45% of the respondents are already done with their vacation plans.

Apart from this, the emergence of the term “staycation” is also giving rise to hotel bookings. Additionally, business travels are likely to bounce back next year with an expectation of people returning to offices in the post-vaccine word.

Here we focus on Expedia, TripAdvisor and MakeMyTrip, which have room to run in 2021. Moreover, these stocks are well-poised to capitalize on the aforementioned trend on the back of their strong fundamentals.

Expedia is benefiting from the moderation in the cancellation of bookings. Further, improving performance of Vrbo remains a positive. Growing bookings via Vrbo is benefiting the company.

The company is gaining from stabilizing travel trends, which are leading to sequential improvement in its financial performance. In third-quarter 2020, the company’s gross bookings were $8.6 billion, which soared 218.1% from the previous quarter.

Notably, Expedia’s strengthening global lodging portfolio remains a major positive. Further, its strong supply acquisition efforts, strategic investments, and product innovation endeavors are key catalysts. Further, this Zacks Rank #3 (Hold) company remains optimistic about cost-control initiatives that will help in countering the coronavirus-induced disruptions.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy)stocks here.

The Zacks Consensus Estimate for 2021 earnings has moved up 118.4% to 83 cents per share over the past 60 days.


TripAdvisor is benefiting from its expanding footprint in the international restaurant reservation space. Further, the company’s focus on new initiatives and strengthening the Experiences & Dining segment remain positives. Additionally, solid marketing initiatives, strong efforts toward its hotel business and innovative mobile-centric products remain encouraging for its user-base growth.

Additionally, the company’s expanded travel safe initiatives to include more than 120,000 hospitality businesses remain noteworthy. Further, its deepening focus toward strengthening customer relationships, and delivering more value to consumers and partners positions the business well for the near term.

Currently, TripAdvisor carries a Zacks Rank #3.

TripAdvisor, Inc. Price and Consensus

 

TripAdvisor, Inc. Price and Consensus

TripAdvisor, Inc. price-consensus-chart | TripAdvisor, Inc. Quote

MakeMyTrip is gaining strongly from improving travel conditions and reopening of the economies. The decreasing number of COVID-19 cases in India is encouraging domestic trips. The company is benefiting from increasing domestic travel. Further, its 55% of the domestic properties have resumed operations, which remains noteworthy.

Further, recovering hotel demand as a result of a rise in short-stay getaway vacations, great travel deals and hygienically safe properties remains a major positive. Further, this Zacks Rank #3 company remains optimistic regarding its cost-control initiatives, MySafety and GoSafe programs, and strengthening hotel business.

The Zacks Consensus Estimate for fiscal 2021 loss has narrowed from $1.34 to $1 per share over the past 60 days. For fiscal 2022, the consensus mark for loss has narrowed from $1.05 to 96 cents per share over the same time frame

Zacks Top 10 Stocks for 2021

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