Courtesy of an uptick in personal income and wages, traveling by car, train or plane is expected to be really high this Thanksgiving. More travelers are expected to hit the roads or take to the skies in this span, a number that would surpass the levels of the past 14 years.
Given this near-term surge in travel demand, taking a look at travel and leisure companies will be judicious. As bulk of the travel is expected to be via road, rental car giants are poised to be among the biggest gainers.
Higher travel during the holiday period will certainly boost airlines, while pre-tax profits of all major airlines are already up so far this year. By the way, more travel will lead to increased hotel occupancy and in turn revenue per available room.
Highest Thanksgiving Travel Volume Since 2005
According to the American Automobile Association (AAA), about 55 million travelers are forecasted to travel 50 miles or more. This would be the highest since 2005. Thanksgiving Day weekend travel is anticipated to increase 2.9% from last year.
About 89% or 49.3 million travelers are expected to travel by car, an increase of 2.8% over the last Thanksgiving weekend. Modes of transport including cruises, trains and buses are expected to make up 2.7% of all travel this Thanksgiving, serving around 1.49 million passengers.
However, 4.45 million travelers are expected to opt for flights, indicating a 4.6% rise from the year-ago level. Flights are expected to account for 8.1% of overall travel this Thanksgiving.
Airports to be Busy
Airlines for America (A4A), the trade group representing the interests of U.S. airlines, projects that 31.6 million passengers will fly during Thanksgiving, suggesting a 3.7% rise from the same period last year. The trade organization expects U.S. airlines to transport an average of 2.63 million passengers per day over the 12-day period. The busiest day is expected to be the Sunday after Thanksgiving — Dec 1.
What’s more, compared to last year’s Thanksgiving travel period, U.S. airlines are expected to operate 859 more flights per day to accommodate an expected additional 93,000 daily passengers this time around.
What’s Boosting Travel This Thanksgiving?
A4A Vice President and Chief Economist John Heimlich said that “the popularity of air travel continues to soar this holiday season, as airlines and airports alike continue to invest billions of dollars into improving the quality of the experience and the efficiency of their operations.”
At the same time, Paula Twidale, vice president, AAA Travel said that “Strong economic fundamentals are motivating Americans to venture out this holiday in near-record numbers. Consumer spending remains strong, thanks to increasing wages, disposable income and household wealth, and travel remains one of their top priorities for the holiday season.”
5 Stocks to Ride the Thanksgiving Rush
With the rise in income levels, people are willing to spend more on travel this holiday period. As travel volumes are expected to shoot up, keeping an eye on travel and leisure as well as car rental companies seems prudent. Increase in travel will surely lead to an uptick in demand air tickets and hotel rooms as well. We have, thus, selected five such stocks that are poised to make the most of the Thanksgiving rush.
United Airlines Holdings, Inc. UAL provides air transportation services in North America. It transports people through its mainline and regional operations. The company currently has a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for its current-year earnings has moved up 2.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 31.5% versus the Transportation - Airline industry’s projected rise of 3%.
Alaska Air Group, Inc. ALK provides passenger and cargo air transportation services. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved 6.1% north over the past 60 days. The company’s expected earnings growth rate for the current year is 41% versus the Transportation - Airline industry’s estimated growth of 3%.
Hertz Global Holdings, Inc. provides airport and off airport vehicle rental and leasing services. The company currently has a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for its current-year earnings has climbed 11.3% over the past 60 days. The company’s expected earnings growth rate for the current quarter is 54.6% versus the Transportation - Services industry’s expected decline of 52.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Marriott Vacations Worldwide Corporation VAC develops, markets, sells, and manages vacation ownership and related products. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings has moved up 1.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 35.5% versus the Hotels and Motels industry’s projected rise of 6.9%.
SeaWorld Entertainment, Inc. SEAS operates as a theme park and entertainment company in the United States. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its next-year earnings has risen 2.2% over the past 30 days. The company’s expected earnings growth rate for the current year is 182.7% versus the Leisure and Recreation Services industry’s estimated decline of 2.5%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>