Beach stocks fly high: travel and tourism firms return six times more for shareholders than global equities
- eToro analysis looked at recent performance of so-called ‘beach stocks’ – bookings, entertainment, airlines, cruises, and hotels
- Global and European beach baskets returned 46% and 24% respectively in past year vs 7% for global equities
- Best performers included cruise firm Royal Caribbean (84%) and Delta Airlines (54%)
As summer holidays approach and the travel and tourism industry resurges, analysis from trading and investing platform eToro shows ‘beach stocks’ are flying high, returning six times as much as global equities in the past year.
eToro created two equal-weight 15-stock beach baskets (which include companies in bookings, entertainment, airlines, cruises, and hotels), one for global industry leaders and another for European-focused firms. Both have comfortably outperformed global markets in the last year. While the global basket gained 46% in the past 12 months, even outpacing the high-flying NASDAQ-100 (+37%), the European basket returned 24%, with global equities growing by just 7% over the same period.
Ben Laidler, Global Markets Strategist at eToro, explained: “Beach stocks have pulled off an amazing performance this past year, thanks to strong growth across the travel and hospitality sectors. Air traffic saw a huge increase of 37% last year, fueled by international travel. Hotel bookings also skyrocketed by 80%, and the cruise industry saw a 50% rebound in passenger numbers, surpassing the pre-pandemic levels of 2019.
“After three consecutive years of impressive 20% recovery growth rates, the travel industry is now poised to make further strides past its pre-pandemic highs as it looks to catch up with a global economy that is on track to be 25% larger this year compared to 2019.”
Among the best performers in the global basket were Royal Caribbean, up 84%, followed by Delta Airlines (54%) and Carnival Cruises (43%). Conversely, American Airlines’ share price failed to move over the past year, while Walt Disney saw a modest increase of 4%.
In Europe, Melia Hotels stood out as the top performer with a 31% rise, closely followed by travel agent EDreams (27%) and Accor Hotels (24%). On the other hand, Lindblad Expeditions faced a significant decline of -33%, while gaming group Evolution and travel-tech Amadeus experienced more moderate declines of -4% and -2% respectively.
| Beach stocks baskets (bookings, entertainment, airlines, cruises, and hotels) | |||
| Global basket | YTD | European basket | YTD |
| Booking | 43% | Edreams | 27% |
| Expedia | 21% | Booking | 43% |
| Airbnb | 16% | Amadeus | -2% |
| Walt Disney | 4% | Flutter Entertainment | 1% |
| Live Nation | 25% | Evolution | -4% |
| Las Vegas Sands | -26% | Fluidra | 39% |
| Delta Air Lines | 54% | IAG | 17% |
| Ryanair | 20% | Aena | 17% |
| American Airlines | 0% | Ryanair | 20% |
| Marriott | 33% | Melia Hotels | 31% |
| Intercontinental Hotels | 42% | Accor Hotels | 24% |
| Hilton | 40% | NH Hotels | 17% |
| Carnival Cruises | 43% | Carnival Cruises | 43% |
| Royal Caribbean | 84% | Tui | 3% |
| Norwegian Cruise Lines | 15% | Lindblad Expeditions | -33% |
| Total | 46% | Total | 24% |
Past performance is not an indication of future results.
“The travel and tourism industry is confounding the skeptics and enjoying a ‘new normal’ of strong demand and pricing power. Volumes have regained pre-pandemic levels but now lag a global economy that is a quarter bigger, whilst limited new capacity keeps pricing power high.”, concludes Laidler.
About this data
eToro’s beach baskets are two equal-weight 15-stock baskets constructed with the 15 largest US-based global and European companies in the travel and hospitality sector by market capitalization. Data source: Refinitiv. Data from 5/03/2024.
About eToro
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