The future of the U.S. economy is promising, marked by a robust recovery in the travel sector. In fact, spending and air passenger numbers are exceeding pre-pandemic levels. Leisure travel is resilient, and business and group bookings are on the rise, indicating a positive trend. International outbound travel is rebounding, contributing to a favorable outlook.
Despite some challenges, such as concerns about inflation, the overall trajectory points toward economic growth and recovery in 2024. So, it’s time to invest in travel stocks, with the industry at 95% of 2019 numbers and expected to grow past 100%.
Expedia Group Inc. (EXPE)
Expedia Group Incorporated (NASDAQ:EXPE) is a leading online travel agency that provides an array of services for flights, hotels, and vacation packages.
And, this organization has steadily increased in value in the past few years, with current year over year (YOY) growth of 53.01%. Its loyalty program, UI improvements, and best-price guarantee program have made EXPE a top-performing travel company.Â
Also, the company’s financials support this. Ascendiant Capital Markets has set a price target of $168.00 for it, above its current price of $151.85. Additionally, it has a profit margin of 6.70%, with an operating margin of 23.39%. Management is quite effective, with a 21.90% return on equity. However, it has a high debt/equity, sitting at 223.45%.
Expedia is growing its travel booking platform by investing in the use of AI chatbots to streamline the user experience. A welcome innovation in the travel market, it is projected to reach a value of $928.4 billion, with a CAGR of 4.3%. Additionally, it has programs such as the best price guarantee, which ensures consumer confidence.
Southwest Airlines Co. (LUV)
Southwest Airlines Company (NYSE:LUV) is an American airline making air travel affordable and convenient for all, using cheaper airports and smart scheduling.
LUV’s stock is up 0.90% YTD at $29.14 and is covered by 18 analysts. Its 12-month price forecast has a high estimate of $47 representing an increase of 61.3%.Â
Specifically, Southwest’s market cap rose by 0.93% from 2023-2024 seeing margins grow from $17.21 billion to $17.37 billion. Additionally, revenue experienced an increase of 6.83% in the same time frame. And, revenue growth increased by 20.72% which is 166.70% more than the sector median of 7.77%.
LUV has always had core efficient operations looking to cut costs, leading to a decrease in ticket prices. This has been its main competitive advantage over competitors like United, Delta, and American. Throughout 2023, LUV has focused its efforts on customer service and satisfaction. This has led to a revamped winter preparedness system as well as major improvements to the mobile app, including bag tracking.
Carnival Corp (CCL)
Carnival Corporation (NYSE:CCL) is a leading leisure travel company specializing in global cruises. In fact, its diverse portfolio includes Holland America, Princess, and Alaska Tours. It provides extraordinary vacation experiences across North America, Europe, Australia, and Asia with headquarters in Miami, Florida.
So, analysts predict CCL’s stock to range between a high of $25, and a low of $7 with an average of $17.75. CCL has strong financials with $29.5 billion in revenue and $10.7 billion in profit and a growth rate of 80.25% year to date (YTD).
CCL’s strategic expansion, as represented by Holland America Line’s 2025-2026 Asia Cruise Season, demonstrates the company’s dedication to global reach. Also, the company is entering emerging markets with over 50 ports in 11 countries, various itineraries, and unique cultural experiences. This expansion indicates growth potential, which boosts investor confidence.
On the date of publication, Michael Que did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
