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4 Solid Stocks to Buy on Boom in the Holiday Season Travel

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An increasing number of Americans are making travel plans this holiday season, starting with Thanksgiving, which is expected to be one of the busiest days at airports in more than two years. This has also seen a jump in hotel bookings, as the majority of those who are traveling plan to stay at hotels. 

Soaring airline ticket prices and hotel room rents have been a concern but people are willing to shell out more after a gap of two years when holiday traveling slowed down due to the pandemic. Given this scenario, hotel and leisure stocks like Hilton Grand Vacations Inc. (HGV - Free Report) , Hyatt Hotels Corporation (H - Free Report) , RCI Hospitality Holdings, Inc. (RICK - Free Report) and Wyndham Hotels & Resorts, Inc. (WH - Free Report) are expected to benefit in the near term.

More Americans Planning Vacations

According to a Deloitte report, 31% of Americans plan to travel between Thanksgiving and mid-January. Those planning to travel this holiday season have an average budget of $1,287. Thanksgiving Day and Christmas are expected to be the busiest days, with 15% planning to travel on Thanksgiving and 14% between Christmas and New Year.

A separate report from the American Automobile Association shows that about 54.6 million Americans will travel more than 50 miles this Thanksgiving weekend, up 15% from last year and almost close to the pre-pandemic levels.

Among those traveling, 49 million will avail car, up 0.4% from 2021, while 4.5 million will travel by air. The remaining 1.4 million will take a train, bus, or cruise.

Understandably, people are desperate to travel after more than two years. Restrictions over travel and mask mandates have been completely lifted, which has given people the confidence to travel after the pandemic brought almost everything to a halt over the past two years.

According to a national Hotel Booking Index Survey commissioned by the American Hotel & Lodging Association and conducted by Morning Consult, people planning to travel this year for leisure plan to stay at hotels. Among them, 31% traveling on Thanksgiving plan to stay at hotels, 10% higher than last year.

Also, 28% of those traveling during Christmas plan to stay at hotels, up from 23% recorded last year.

Among those who have already made holiday plans and will travel during the three-month holiday season period, 54% will be staying in hotels. Additionally, according to the survey, 28% and 31% of Americans, respectively, plan to travel over Thanksgiving and Christmas, both of which are in line with 2021.

Airline tickets and hotel rooms are becoming more expensive due to rising energy and commodity prices. The Consumer Price Index (CPI) increased 7.7% year over year in October. Although inflation has declined lately after rising by 8.2% in September, it remains well beyond the Fed's target of 2%.

However, people are still keen on spending on traveling and aren’t hesitant about paying more for hotel rooms.

Our Choices

Given this situation, it would be wise to invest in hotel and leisure stocks.

Hilton Grand Vacations Inc. is engaged in hospitality business. HGV markets and operates vacation ownership resorts. Hilton Grand Vacationsalso manages and serves club membership programs which include Hilton Grand Vacations Club and The Hilton Club.

Hilton Grand Vacations’ expected earnings growth rate for the current year is 60.9%. The Zacks Consensus Estimate for current-year earnings has improved 19.3% over the past 60 days. HGV currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Hyatt Hotels Corporation is a leading global hospitality company engaged in the development, ownership, operation, management, franchising and licensing of a portfolio of properties, including hotels, resorts and residential and vacation ownership properties around the world. As of Mar 31 2022, H’s portfolio included more than 1,150 properties in 71 countries across six continents.

Hyatt Hotels Corporation’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 70.1% over the past 60 days. H presently carries a Zacks Rank #2 (Buy).

RCI Hospitality Holdings, Inc. owns and/or operates adult nightclubs that offer live adult entertainment, restaurant, and bar services. RICK operates adult nightclubs under the name Rick's Cabaret, Club Onyx, XTC Cabaret, Tootsie's Cabaret, Cabaret North, Jaguars and Cabaret East. RCI Hospitality Holdings also owns and operates adult Internet Websites.

RCI Hospitality Holdings’ expected earnings growth rate for the current year is 29.2%. The Zacks Consensus Estimate for current-year earnings has improved 2.3% over the past 60 days. RICK presently has a Zacks Rank #2.

Wyndham Hotels & Resorts, Inc. provide a hotel and resort chain. WH operates primarily in Canada, Mexico, Colombia, Ecuador, Turkey, Germany, the UK, the Caribbean and Margarita Island in Venezuela. Wyndham Hotels and Resorts is headquartered in New Jersey, United States.

Wyndham Hotels & Resorts’ expected earnings growth rate for the current year is 21.5%. The Zacks Consensus Estimate for current-year earnings has improved 5.5% over the past 60 days. WH currently has a Zacks Rank #2.

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