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More Americans are expected to travel this Memorial Day holiday weekend despite inflation and pricey airline tickets. According to travel service provider American Automobile Association (“AAA”), this summer travel season could be one for the record books, especially at airports, which are bracing for a flood of flyers.
An increase in travel demand should boost revenues and profitability for the travel and tourism industry, thereby leading to higher share prices. Investors can tap this trend through ETFs that stand to profit big time from an upbeat Memorial Day travel trend. As such, ETFMG Travel Tech ETF (AWAY - Free Report) , Defiance Hotel, Airline, and Cruise ETF (CRUZ - Free Report) , ALPS Global Travel Beneficiaries ETF (JRNY - Free Report) , AdvisorShares Hotel ETF (BEDZ - Free Report) and Kelly Hotel & Lodging Sector ETF look like intriguing picks.
Busy Travel Trends
According to travel service provider American Automobile Association (“AAA”), about 42.3 million Americans will travel 50 miles (80 km) or more over the Memorial Day weekend (May 25-29), up 7% from last year's Memorial Day weekend. This would represent the “third busiest Memorial Day weekend” in over two decades. Of them, 37.1 million are expected to go on a road trip, 3.4 million would fly, and 1.85 million would travel by train and other modes (including buses and cruises).
Per the booking data, demand for iconic cities, international vacation packages, and cruises are high. Tourist hotspots like Orlando, New York City, and Las Vegas and Cruise port cities in Florida and Alaska, as well as Seattle, are top domestic destinations. Other popular U.S. cities for this Memorial Day include Denver, Boston, Anaheim, and Canton, OH – home of the Pro Football Hall of Fame (read: Forget Mixed Airlines Earnings: Play JETS ETF on Upbeat Outlook).
Relatively lower gas price after last year’s record has provided some relief to travelers. Heading into Memorial Day weekend, the U.S. retail gasoline price has averaged $3.53 per gallon, 26% lower than the inflation-adjusted price one year ago, per the latest data of EIA.
However, airline ticket costs, hotel room prices, eating out and recreation services costs have risen. AAA booking data shows a 40% increase in airfare to this year’s top destinations. Hotel rooms are up 3.3% over last year, eating out is 8.6% more expensive and recreation services cost 5.8% more than they did in 2022, according to the latest federal data.
ETFMG Travel Tech ETF is the first ETF that offers direct access to the technology-focused global travel and tourism industry. It follows the Prime Travel Technology Index, charging investors 75 bps in annual fees. ETFMG Travel Tech ETF holds 33 stocks in its basket, with travel bookings & reservations companies accounting for 58.3% of assets, followed by a 14.8% share in travel price comparison firms.
ETFMG Travel Tech ETF has accumulated $121.4 million in its asset base and trades in an average daily volume of 39,000 shares (read: Time for Leisure & Travel ETFs?).
Defiance Hotel, Airline, and Cruise ETF (CRUZ - Free Report)
Defiance Hotel, Airline, and Cruise ETF tracks the BlueStar Global Hotels, Airlines, and Cruises Index, which measures the performance of globally listed companies primarily engaged in the travel and tourism industries. Holding 56 stocks in its basket, American firms make up for 47.8% of the portfolio, while Liberia, Panama and the United Kingdom round off the next three with single-digit exposure each.
Defiance Hotel, Airline, and Cruise ETF, launched in June 2021, has gathered around $52.9 million in its asset base and charges 45 bps in annual fees. Volume is lower as it exchanges around 12,000 shares a day on average.
ALPS Global Travel Beneficiaries ETF provides diversified exposure to the global travel industry by tracking the S-Network Global Travel Index. The fund invests in 78 companies engaged in booking and rental agencies, airlines and airport services, hotels, casinos and cruise lines, along with travel-related companies identified through machine learning algorithms, such as luxury retail, entertainment, leisure, food and beverage and payment processing vendors.
ALPS Global Travel Beneficiaries ETF has accumulated $6.2 million in its asset base and charges 65 bps in annual fees. JRNY trades in an average daily volume of 1,000 shares.
AdvisorShares Hotel ETF is actively managed and provides exposure to the global hotel and lodging industry as well as its related services. It holds 35 stocks in its basket that are pretty spread across components (see: all the Consumer Discretionary ETFs here).
AdvisorShares Hotel ETF charges 99 bps in annual fees and trades in an average daily volume of 1,000 shares. It has amassed $4 million in its asset base.
Kelly Hotel & Lodging Sector ETF
Kelly Hotel & Lodging Sector ETF tracks the Strategic Hotel & Lodging Sector Index, which measures the performance of companies that specialize in providing hotel, motel, lodging, residential, and timeshare properties management services, operational services, including lodging platform services (e.g., global marketplaces for private accommodations) and companies that own or lease hotels, motels, lodges, resorts, timeshare properties. It holds 37 stocks in its basket, with a concentration on the top four firms.
Kelly Hotel & Lodging Sector ETF has accumulated $0.7 million in its asset base while charging 78 bps in annual fees. It trades in an average daily volume of about 100 shares.
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5 ETF Gateways for This Memorial Day
More Americans are expected to travel this Memorial Day holiday weekend despite inflation and pricey airline tickets. According to travel service provider American Automobile Association (“AAA”), this summer travel season could be one for the record books, especially at airports, which are bracing for a flood of flyers.
An increase in travel demand should boost revenues and profitability for the travel and tourism industry, thereby leading to higher share prices. Investors can tap this trend through ETFs that stand to profit big time from an upbeat Memorial Day travel trend. As such, ETFMG Travel Tech ETF (AWAY - Free Report) , Defiance Hotel, Airline, and Cruise ETF (CRUZ - Free Report) , ALPS Global Travel Beneficiaries ETF (JRNY - Free Report) , AdvisorShares Hotel ETF (BEDZ - Free Report) and Kelly Hotel & Lodging Sector ETF look like intriguing picks.
Busy Travel Trends
According to travel service provider American Automobile Association (“AAA”), about 42.3 million Americans will travel 50 miles (80 km) or more over the Memorial Day weekend (May 25-29), up 7% from last year's Memorial Day weekend. This would represent the “third busiest Memorial Day weekend” in over two decades. Of them, 37.1 million are expected to go on a road trip, 3.4 million would fly, and 1.85 million would travel by train and other modes (including buses and cruises).
Per the booking data, demand for iconic cities, international vacation packages, and cruises are high. Tourist hotspots like Orlando, New York City, and Las Vegas and Cruise port cities in Florida and Alaska, as well as Seattle, are top domestic destinations. Other popular U.S. cities for this Memorial Day include Denver, Boston, Anaheim, and Canton, OH – home of the Pro Football Hall of Fame (read: Forget Mixed Airlines Earnings: Play JETS ETF on Upbeat Outlook).
Relatively lower gas price after last year’s record has provided some relief to travelers. Heading into Memorial Day weekend, the U.S. retail gasoline price has averaged $3.53 per gallon, 26% lower than the inflation-adjusted price one year ago, per the latest data of EIA.
However, airline ticket costs, hotel room prices, eating out and recreation services costs have risen. AAA booking data shows a 40% increase in airfare to this year’s top destinations. Hotel rooms are up 3.3% over last year, eating out is 8.6% more expensive and recreation services cost 5.8% more than they did in 2022, according to the latest federal data.
ETFs Set to Surge
ETFMG Travel Tech ETF (AWAY - Free Report)
ETFMG Travel Tech ETF is the first ETF that offers direct access to the technology-focused global travel and tourism industry. It follows the Prime Travel Technology Index, charging investors 75 bps in annual fees. ETFMG Travel Tech ETF holds 33 stocks in its basket, with travel bookings & reservations companies accounting for 58.3% of assets, followed by a 14.8% share in travel price comparison firms.
ETFMG Travel Tech ETF has accumulated $121.4 million in its asset base and trades in an average daily volume of 39,000 shares (read: Time for Leisure & Travel ETFs?).
Defiance Hotel, Airline, and Cruise ETF (CRUZ - Free Report)
Defiance Hotel, Airline, and Cruise ETF tracks the BlueStar Global Hotels, Airlines, and Cruises Index, which measures the performance of globally listed companies primarily engaged in the travel and tourism industries. Holding 56 stocks in its basket, American firms make up for 47.8% of the portfolio, while Liberia, Panama and the United Kingdom round off the next three with single-digit exposure each.
Defiance Hotel, Airline, and Cruise ETF, launched in June 2021, has gathered around $52.9 million in its asset base and charges 45 bps in annual fees. Volume is lower as it exchanges around 12,000 shares a day on average.
ALPS Global Travel Beneficiaries ETF (JRNY - Free Report)
ALPS Global Travel Beneficiaries ETF provides diversified exposure to the global travel industry by tracking the S-Network Global Travel Index. The fund invests in 78 companies engaged in booking and rental agencies, airlines and airport services, hotels, casinos and cruise lines, along with travel-related companies identified through machine learning algorithms, such as luxury retail, entertainment, leisure, food and beverage and payment processing vendors.
ALPS Global Travel Beneficiaries ETF has accumulated $6.2 million in its asset base and charges 65 bps in annual fees. JRNY trades in an average daily volume of 1,000 shares.
AdvisorShares Hotel ETF (BEDZ - Free Report)
AdvisorShares Hotel ETF is actively managed and provides exposure to the global hotel and lodging industry as well as its related services. It holds 35 stocks in its basket that are pretty spread across components (see: all the Consumer Discretionary ETFs here).
AdvisorShares Hotel ETF charges 99 bps in annual fees and trades in an average daily volume of 1,000 shares. It has amassed $4 million in its asset base.
Kelly Hotel & Lodging Sector ETF
Kelly Hotel & Lodging Sector ETF tracks the Strategic Hotel & Lodging Sector Index, which measures the performance of companies that specialize in providing hotel, motel, lodging, residential, and timeshare properties management services, operational services, including lodging platform services (e.g., global marketplaces for private accommodations) and companies that own or lease hotels, motels, lodges, resorts, timeshare properties. It holds 37 stocks in its basket, with a concentration on the top four firms.
Kelly Hotel & Lodging Sector ETF has accumulated $0.7 million in its asset base while charging 78 bps in annual fees. It trades in an average daily volume of about 100 shares.