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5 ETFs to Make the Most of Solid Thanksgiving Travel Trend
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With travel demand remaining robust, a higher number of Americans are gearing up for Thanksgiving travel this year. Increased travel demand should boost revenues and profitability for the travel and tourism industry, thereby leading to higher share prices.
Investors shouldn’t miss this opportunity and could tap this trend through ETFs that stand to profit big time from the upbeat Thanksgiving travel trend. As such, Defiance Hotel, Airline, and Cruise ETF (CRUZ - Free Report) , ALPS Global Travel Beneficiaries ETF (JRNY - Free Report) , AdvisorShares Hotel ETF (BEDZ - Free Report) , Kelly Hotel & Lodging Sector ETF and U.S. Global Jets ETF (JETS - Free Report) are intriguing picks.
Solid Travel Trends
Travel service provider American Automobile Association (AAA) expects 2023 to be the third-busiest Thanksgiving travel season in the United States over the last two decades. About 55.4 million people will travel 50 miles or more from home this Thanksgiving. This increased 2.3% from last year. Of the travelers, 49.1 million (up 1.7% from the previous year) will go on road trips, 4.7 million (up 6.6%) will fly and the remaining 1.55 million (up 11%) will travel by train, bus or cruise (read: 5 ETFs to Binge on This Thanksgiving Week).
However, travelers may face challenges due to weather conditions. A storm system is anticipated to potentially disrupt travel plans, especially for the 55 million people traveling for the holiday. This system, a low-pressure area, moved through the Western United States the weekend before Thanksgiving. Additionally, a pre-Thanksgiving storm system bringing heavy rain and wind could lead to significant travel disruptions along the East Coast.
As Thanksgiving holiday travel approaches, gas prices are falling fast and could hit the lowest Thanksgiving day price since 2020. The national average for a gallon of regular gas was about $3.31 on Nov 20, 25 cents cheaper than a month ago and 36 cents lower than the same period in 2022, according to AAA. The average national price for a gallon of gas could hit $3.25 by Nov 23, which would be the lowest price on Thanksgiving day since 2020 when the Covid-19 pandemic crushed demand and gas fell to $2.11 per gallon, according to GasBuddy.
Further, domestic trips are more affordable than last year, with the notable exception of slightly higher airfares. In contrast, international travel costs have increased, although international flight prices have slightly decreased. Similarly, domestic accommodation costs declined while international increased.
The average price for a domestic hotel stay is $598, down 12% from 2022, while the average price for an international hotel stay is $772, up 5% from last year. Domestic rental car reservations average $590, marking a significant 20% decrease from 2022, while international rentals are at $696, up 9% from last year. Meanwhile, domestic cruises average $1,507, down 12% from 2022, and international cruises cost around $2,902, up 24% from last year.
Airline companies expect record travel demand this Thanksgiving. The Transportation Security Administration expects to screen 30 million passengers from Nov 17 through Nov 28, the most ever. The Sunday after Thanksgiving is expected to be the busiest day during that period, with an estimated 2.9 million passengers taking to the skies (read: Airlines Ready for Record Thanksgiving Travel: ETF in Focus).
Another report from the U.S. airlines group, Airlines for America (A4A), shows that nearly 30 million passengers will travel globally during the 11-day (Nov 17 -Nov 27) Thanksgiving travel period, which is an all-time high. A4A projects that 2.7 million passengers will fly per day over the holiday, up 9% from 2022. The Sunday after Thanksgiving, Nov 26, is predicted to be the busiest day of the holiday period, with a record-setting 3.2 million passengers. To fulfill the higher demand, air carriers are offering 253,000 additional seats per day, operating larger aircraft, adjusting routes to reduce strain on the system, and building the largest workforce in two decades.
Let’s delve deeper into the above-mentioned 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 passenger airline, hotel and cruise industries. Holding 57 stocks in its basket, American firms make up 48.5% of the portfolio, while the U.K., Panama, and Liberia round off the next three with single-digit exposure each.
Defiance Hotel, Airline, and Cruise ETF has gathered $37.9 million in its asset base and charges 45 bps in annual fees. Volume is lower as it exchanges around 23,000 shares a day on average. CRUZ has a Zacks ETF Rank #3.
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 77 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 million in its asset base and charges 65 bps in annual fees. JRNY trades in an average daily volume of 500 shares (read: Consumer Spending Boosts U.S. Q3 GDP: ETFs to Buy).
AdvisorShares Hotel ETF is the actively managed and only ETF investing exclusively in global hotel and travel-related services. AdvisorShares Hotel ETF holds 27 stocks in its basket that are pretty spread across components.
AdvisorShares Hotel ETF charges 99 bps in annual fees and trades in an average daily volume of 500 shares. It has amassed $3.7 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 500 shares.
U.S. Global Jets ETF provides exposure to the global airline industry, including airline operators and manufacturers from all over the world, by tracking the U.S. Global Jets Index. The product holds 51 securities and charges 60 bps in annual fees.
U.S. Global Jets ETF has gathered $1.5 billion in its asset base and sees a heavy trading volume of nearly 5 million shares a day. JETS has a Zacks ETF Rank #4 (Sell) with a High-risk outlook.
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5 ETFs to Make the Most of Solid Thanksgiving Travel Trend
With travel demand remaining robust, a higher number of Americans are gearing up for Thanksgiving travel this year. Increased travel demand should boost revenues and profitability for the travel and tourism industry, thereby leading to higher share prices.
Investors shouldn’t miss this opportunity and could tap this trend through ETFs that stand to profit big time from the upbeat Thanksgiving travel trend. As such, Defiance Hotel, Airline, and Cruise ETF (CRUZ - Free Report) , ALPS Global Travel Beneficiaries ETF (JRNY - Free Report) , AdvisorShares Hotel ETF (BEDZ - Free Report) , Kelly Hotel & Lodging Sector ETF and U.S. Global Jets ETF (JETS - Free Report) are intriguing picks.
Solid Travel Trends
Travel service provider American Automobile Association (AAA) expects 2023 to be the third-busiest Thanksgiving travel season in the United States over the last two decades. About 55.4 million people will travel 50 miles or more from home this Thanksgiving. This increased 2.3% from last year. Of the travelers, 49.1 million (up 1.7% from the previous year) will go on road trips, 4.7 million (up 6.6%) will fly and the remaining 1.55 million (up 11%) will travel by train, bus or cruise (read: 5 ETFs to Binge on This Thanksgiving Week).
However, travelers may face challenges due to weather conditions. A storm system is anticipated to potentially disrupt travel plans, especially for the 55 million people traveling for the holiday. This system, a low-pressure area, moved through the Western United States the weekend before Thanksgiving. Additionally, a pre-Thanksgiving storm system bringing heavy rain and wind could lead to significant travel disruptions along the East Coast.
As Thanksgiving holiday travel approaches, gas prices are falling fast and could hit the lowest Thanksgiving day price since 2020. The national average for a gallon of regular gas was about $3.31 on Nov 20, 25 cents cheaper than a month ago and 36 cents lower than the same period in 2022, according to AAA. The average national price for a gallon of gas could hit $3.25 by Nov 23, which would be the lowest price on Thanksgiving day since 2020 when the Covid-19 pandemic crushed demand and gas fell to $2.11 per gallon, according to GasBuddy.
Further, domestic trips are more affordable than last year, with the notable exception of slightly higher airfares. In contrast, international travel costs have increased, although international flight prices have slightly decreased. Similarly, domestic accommodation costs declined while international increased.
The average price for a domestic hotel stay is $598, down 12% from 2022, while the average price for an international hotel stay is $772, up 5% from last year. Domestic rental car reservations average $590, marking a significant 20% decrease from 2022, while international rentals are at $696, up 9% from last year. Meanwhile, domestic cruises average $1,507, down 12% from 2022, and international cruises cost around $2,902, up 24% from last year.
Airline companies expect record travel demand this Thanksgiving. The Transportation Security Administration expects to screen 30 million passengers from Nov 17 through Nov 28, the most ever. The Sunday after Thanksgiving is expected to be the busiest day during that period, with an estimated 2.9 million passengers taking to the skies (read: Airlines Ready for Record Thanksgiving Travel: ETF in Focus).
Another report from the U.S. airlines group, Airlines for America (A4A), shows that nearly 30 million passengers will travel globally during the 11-day (Nov 17 -Nov 27) Thanksgiving travel period, which is an all-time high. A4A projects that 2.7 million passengers will fly per day over the holiday, up 9% from 2022. The Sunday after Thanksgiving, Nov 26, is predicted to be the busiest day of the holiday period, with a record-setting 3.2 million passengers. To fulfill the higher demand, air carriers are offering 253,000 additional seats per day, operating larger aircraft, adjusting routes to reduce strain on the system, and building the largest workforce in two decades.
Let’s delve deeper into the above-mentioned 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 passenger airline, hotel and cruise industries. Holding 57 stocks in its basket, American firms make up 48.5% of the portfolio, while the U.K., Panama, and Liberia round off the next three with single-digit exposure each.
Defiance Hotel, Airline, and Cruise ETF has gathered $37.9 million in its asset base and charges 45 bps in annual fees. Volume is lower as it exchanges around 23,000 shares a day on average. CRUZ has a Zacks ETF Rank #3.
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 77 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 million in its asset base and charges 65 bps in annual fees. JRNY trades in an average daily volume of 500 shares (read: Consumer Spending Boosts U.S. Q3 GDP: ETFs to Buy).
AdvisorShares Hotel ETF (BEDZ - Free Report)
AdvisorShares Hotel ETF is the actively managed and only ETF investing exclusively in global hotel and travel-related services. AdvisorShares Hotel ETF holds 27 stocks in its basket that are pretty spread across components.
AdvisorShares Hotel ETF charges 99 bps in annual fees and trades in an average daily volume of 500 shares. It has amassed $3.7 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 500 shares.
U.S. Global Jets ETF (JETS - Free Report)
U.S. Global Jets ETF provides exposure to the global airline industry, including airline operators and manufacturers from all over the world, by tracking the U.S. Global Jets Index. The product holds 51 securities and charges 60 bps in annual fees.
U.S. Global Jets ETF has gathered $1.5 billion in its asset base and sees a heavy trading volume of nearly 5 million shares a day. JETS has a Zacks ETF Rank #4 (Sell) with a High-risk outlook.