Memorial Day Weekend is around the corner and will start the summer travel season. Deals are flowing in from every corner of the travel industry even amid the ongoing economic turmoil. It’s no secret that consumers (i.e., travelers) are struggling with red-hot inflation and surging gas prices.
This time around, Memorial Day is in a tricky state. While fears of COVID-19 have eased a bit, sky-high inflation will force some consumers to skip or cut back on travel. About 33% of consumers expect a huge inflation impact on their Memorial Day celebration this year.
About half of all celebrants expect to grill or plan a gathering due to high inflation.
AAA predicts that 39.2 million people will travel 50 miles or more from home this Memorial Day weekend, marking an increase of 8.3% year over year,
bringing travel volumes almost in line with 2017, that means the pre-Covid level.
Against this mixed backdrop, below we highlight a few ETF areas that should gain from Memorial Day 2022 and after.
Hotels, Restaurants, Airlines & Cruises
With airfare being up 6% more than last year and mid-range hotel rates increasing by 42%, travel and lodging stocks and ETFs are sure-shot winners. Air travel continues to increase and is up 25% over last year. The share of people traveling by air will likely top the 2019 levels, with 7.7% of travelers choosing it as their preferred mode (it was 7.5% in 2019).
AdvisorShares Hotel ETF (
BEDZ Quick Quote BEDZ - Free Report) – Up 4.42% Past Week
ALPS Global Travel Beneficiaries ETF
JRNY – Up 3.8%
SonicShares Airlines, Hotels, Cruise Lines ETF – Up 2.8%
Defiance Hotel Airline and Cruise ETF (
CRUZ Quick Quote CRUZ - Free Report) – Up 2.7%
U.S. Global Jets ETF (
JETS Quick Quote JETS - Free Report) – Up 2.9%
Direxion Daily Travel & Vacation Bull 2X Shares
OOTO – Up 5.8%
iShares Transportation Average ETF (
IYT Quick Quote IYT - Free Report) – Up 4.2% Food & Beverage
Many will likely buy meat for Memorial Day, followed by fresh produce (67%) and deli items/prepared foods (33%), per a article published on convenience.org. Alcohol will definitely be part of the celebrations.
AdvisorShares Restaurant ETF (
EATZ Quick Quote EATZ - Free Report) – Up 4.54% Past Week
Invesco Dynamic Food & Beverage ETF (
PBJ Quick Quote PBJ - Free Report) – Up 6.2% Retail
Those who are planning vacations, they may be shopping for travel accessories like luggage, clothing & shoes, beauty products, and outdoor gear. Notably, dollar stores have been seeing a surge in demand of late. Dollar General has about 3% weight in the retail ETF RTH.
SPDR S&P Retail ETF ( XRT Quick Quote XRT - Free Report) – Up 5.7% Past Week VanEck Retail ETF ( RTH Quick Quote RTH - Free Report) – Up 5.6%
Despite monumental gas prices this year, 34.9 million people plan to travel by car (per AAA), up 4.6% year over year. Though the share of car travel declined from 92.1% last year to 88.9% this year, the figure is decent and indicates that the car industry should be in good shape in the upcoming summer travel season. Daily car rental rates have decreased 16% compared to last year.
First Trust NASDAQ Global Auto ETF (
CARZ Quick Quote CARZ - Free Report) – Up 2.7% Past Week Insurance
There may be an uptick in travel insurance too to cover up for unexpected delays, loss of luggage or other kind of trip disruptions. Travel insurance provides safety if anything goes wrong ahead of or during one’s trip.
Invesco KBW Property & Casualty Insurance ETF ( KBWP Quick Quote KBWP - Free Report) – Up 4.5% Past Week