S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
Critical asset just had biggest fall on record (Ad)
Peace, music and memories: As the 1960s fade, historians scramble to capture Woodstock's voices
Sports analytics may be outnumbered when it comes to artificial intelligence
Critical asset just had biggest fall on record (Ad)
In Senegal's capital, Nicaragua is a hot ticket among travel agents as migrants try to reach US
California authorizes expansion of Waymo's driverless car services to LA, SF peninsula
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
College athletes will need school approval for NIL deals under bill passed by Utah Legislature
S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
Critical asset just had biggest fall on record (Ad)
Peace, music and memories: As the 1960s fade, historians scramble to capture Woodstock's voices
Sports analytics may be outnumbered when it comes to artificial intelligence
Critical asset just had biggest fall on record (Ad)
In Senegal's capital, Nicaragua is a hot ticket among travel agents as migrants try to reach US
California authorizes expansion of Waymo's driverless car services to LA, SF peninsula
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
College athletes will need school approval for NIL deals under bill passed by Utah Legislature
S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
Critical asset just had biggest fall on record (Ad)
Peace, music and memories: As the 1960s fade, historians scramble to capture Woodstock's voices
Sports analytics may be outnumbered when it comes to artificial intelligence
Critical asset just had biggest fall on record (Ad)
In Senegal's capital, Nicaragua is a hot ticket among travel agents as migrants try to reach US
California authorizes expansion of Waymo's driverless car services to LA, SF peninsula
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
College athletes will need school approval for NIL deals under bill passed by Utah Legislature
S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
Critical asset just had biggest fall on record (Ad)
Peace, music and memories: As the 1960s fade, historians scramble to capture Woodstock's voices
Sports analytics may be outnumbered when it comes to artificial intelligence
Critical asset just had biggest fall on record (Ad)
In Senegal's capital, Nicaragua is a hot ticket among travel agents as migrants try to reach US
California authorizes expansion of Waymo's driverless car services to LA, SF peninsula
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
College athletes will need school approval for NIL deals under bill passed by Utah Legislature

Airline and hotel stocks soar as Thanksgiving travel sets records

Travel Stocks to watch

Key Points

  • American Airlines, Delta, United Airlines and Southwest have performed well recently, but still lag the broad S&P 500.
  • Hotel stocks such as Marriott and Hilton have outperformed the S&P 500 in November.
  • While vacationers may be pulling back on spending, analysts see a rebound in business travel. 
  • 5 stocks we like better than Delta Air Lines

As analysts expect Thanksgiving travel to topple records, the industry as a whole is toppling records. 

Millions of Americans flew somewhere for Thanksgiving. The U.S. Global Jets ETF NYSEARCA: JETS has rallied 12.53% in November after three months of declines, in line with the broader market. 

The ETF’s top components are American Airlines Group Inc. (NASDAQ; AAL), Delta Airlines Inc. NYSE: DAL, United Airlines Holdings Inc. (NASDAQ; UAL) and Southwest Airlines Co. NYSE: LUV.

Those airline stocks have all traded higher in recent weeks, but are still underperforming the broader market in the medium term. 

Other sectors of the travel industry have also traded higher. The hotel industry, as a whole, has been moving up in the past month, outpacing the SPDR S&P 500 ETF Trust NYSEARCA: SPY

Hotel stocks check in with strong returns

The largest hotel stocks are Marriott International Inc. NASDAQ: MAR and Hilton Worldwide Holdings Inc. NYSE: HLT. Both of those are outperforming the S&P 500 in November. 


But softening demand for travel in the U.S. has already put a dent in travel stocks, which skidded in the past three months. Rising costs also hurt the outlook for travel stocks. 

As demand for domestic leisure travel is waning as the “revenge travel” wave subsides, holiday-season travel assumes a new importance as a driver of revenue and earnings.

With the busiest holiday season travel still to come in December, investors are clearly encouraged about the potential for travel demand. 

The Transportation Security Administration anticipates screening 30 million passengers in the days between Nov. 17 and Nov. 28. 

TSA expects busiest holiday season ever

In a statement, TSA Administrator David Pekoske said, "We expect this holiday season to be our busiest ever. In 2023, we have already seen seven of the top 10 busiest travel days in TSA’s history.”’

The data for the part of that period that’s already passed indicate that the forecast may come to pass. 

But there are mixed signals.

For example, Marriott Vacations Worldwide NYSE: VAC has seen slowing earnings and revenue growth. Analysts expect the company to earn $7.51 a share this year, a decrease of 27%.

MarketBeat’s Marriott Vacations Worldwide analyst forecasts show that Bank of America downgraded the stock on November 17, and lowered its price target to $65 from $125. 

Two days earlier, Truist Financial slashed its price target to $149 from $187. 

Disappointing earnings from timeshare company

In its report, Bank of America cited disappointing third-quarter earnings for Marriott Vacations, which is a completely separate entity from the Marriott Hotel chain. Marriott Vacations is a timeshare company that was split off from Marriott International in 2011. 

Bank of America analysts said vacation ownership outside of Maui has been struggling, credit delinquencies are weighing on margins, rentals are facing higher costs from double-digit homeowners association fees, and other costs, including financing costs, are rising.  

Analysts see those issues continuing into 2024.

While vacationers may be tightening the purse strings, there are signals that corporate travel appears to be making a comeback. 

Business travel to surpass pre-pandemic levels

According to the Global Business Travel Association’s most recent forecast, “The industry has rebounded at a more accelerated rate than expected just a year ago and is now expected to surpass its pre-pandemic spending level of $1.4 trillion in 2024 and grow to nearly $1.8 trillion by 2027.”

In 2022, global business travel spending rose 47% to $1.03 trillion, with strong gains continuing and 32% growth expected in 2023. 

The association cited “recession risks that have yet to happen” among factors driving the growth, but economic weakness could, of course, put the kibosh on much of the planned travel. 

Airline and hotel stocks would be the main beneficiaries of a business travel revival. Hotel chains such as Marriott, Hilton, Hyatt Hotels Corp. NYSE: H and InterContinental Hotels Group NYSE: IHG with loyalty programs aimed at business travelers should attract those customers hitting the road again. 

→ This is the #1 Stock to Buy for the AI Tidal Wave (From Chaikin Analytics) (Ad)

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
American Airlines Group (AAL)
3.4396 of 5 stars
$15.66-0.1%N/A14.24Hold$17.57
Hilton Worldwide (HLT)
4.4423 of 5 stars
$204.88+0.3%0.29%47.32Hold$180.69
Hyatt Hotels (H)
4.2137 of 5 stars
$157.85+2.8%0.38%77.38Hold$129.73
Marriott International (MAR)
4.2967 of 5 stars
$250.00+0.1%0.83%24.53Hold$230.80
Marriott Vacations Worldwide (VAC)
2.7295 of 5 stars
$93.94+0.8%3.24%15.03Hold$105.00
Southwest Airlines (LUV)
3.9421 of 5 stars
$33.96-0.9%2.12%45.28Reduce$30.93
U.S. Global Jets ETF (JETS)N/A$20.10-0.3%N/A-5.24N/AN/A
United Airlines (UAL)
4.9697 of 5 stars
$44.84-1.4%N/A5.69Moderate Buy$66.47
Delta Air Lines (DAL)
4.9199 of 5 stars
$42.16-0.3%0.95%5.90Buy$55.54
InterContinental Hotels Group (IHG)
0.5866 of 5 stars
$106.68-0.4%0.91%N/AHoldN/A
SPDR S&P 500 ETF Trust (SPY)N/A$512.85+0.9%1.29%N/AN/AN/A
Compare These Stocks  Add These Stocks to My Watchlist 

Kate Stalter

About Kate Stalter

  • stalterkate@gmail.com

Contributing Author

Retirement, Asset Allocation, and Tax Strategies

Experience

Kate Stalter has been a contributing writer for MarketBeat since 2021.

Additional Experience

Series 65-licensed investment advisor, financial advisor, Blue Marlin Advisors; investment columnist for Forbes, U.S. News & World Report

Areas of Expertise

Asset allocation, technical and fundamental analysis, retirement strategies, income generation, risk management, sector and industry analysis

Education

Bachelor of Arts, Saint Mary’s College, Notre Dame, Indiana; Master of Business Adminstration, Kellogg School of Management at Northwestern University

Past Experience

Founder, financial advisor for Better Money Decisions; editor, stock trading instructor for Investor’s Business Daily; columnist, podcast host, video host for MoneyShow.com; contributor for Morningstar magazine


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