Despite an uncertain macroeconomic environment, the travel industry is anticipated to witness robust demand this year. Amid this, quality travel stocks Airbnb, Inc. (ABNB), Bluegreen Vacations Holding Corporation (BVH), and The Marcus Corporation (MCS) have gained solid momentum.
Total travel spending in the US increased by 0.9% over June 2022 and was up 4.7% year to date through June 2023. Air travel demand surged 12% in June compared to the same month last year as we entered the busy summer travel season.
According to the World Travel and Tourism Council (WTTC) 2023 Economic Impact Research (EIR), the sector is expected to contribute $2.24 trillion to the US economy this year, exceeding the pre-pandemic record of $2.17 trillion in 2019.
Julia Simpson, WTTC President & CEO, said: “The Travel & Tourism sector continues to recover at pace, demonstrating the resilience of the sector and the enduring desire to travel. By the end of the year, the sector’s contribution will be within touching distance of the 2019 peak. We expect 2024 to exceed 2019. Travel & Tourism will be a growth sector over the next ten years.”
Additionally, the worldwide travel & tourism market is predicted to grow at a 4.4% CAGR to $1.02 trillion by 2027. Hotels are the largest segment, with a forecasted market volume of $410 billion in 2023.
Take a detailed look at the stocks mentioned above:
Airbnb, Inc. (ABNB)
ABNB, together with its subsidiaries, operates a platform that enables hosts to offer stays and experiences to guests worldwide.
ABNB’s trailing-12-month levered FCF margin of 25.31% is 505.8% higher than the industry average of 4.18%. Its trailing-12-month net income margin of 0.64x is 31.6% higher than the industry average of 0.49x.
ABNB’s revenue for the fiscal second quarter that ended June 30, 2023, increased 18% year-over-year to $2.48 billion, while its income from operations stood at $523 million, up 41.7% year-over-year. The company’s net income and EPS came in at $650 million and $0.98, up 71.5% and 75% from the prior-year quarter, respectively.
The consensus revenue estimate of $9.84 billion for the year ending December 2023 represents a 17.2% increase year-over-year. Its EPS is expected to grow 36.2% year-over-year to $3.80 for the same period. It surpassed EPS estimates in all four trailing quarters.
ABNB’s shares have gained 50% over the past year to close the last trading session at $143.20. The stock is currently trading above its the 50-day and 200-day moving averages of $131.46 and $114.61, indicating an uptrend.
ABNB’s POWR Ratings reflect this optimistic outlook. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
ABNB has an A grade for Quality and a B grade for Momentum. It is ranked #15 out of 22 stocks in the B-rated Travel - Hotels/Resorts industry. Click here for the additional POWR Ratings for Value, Growth, Sentiment, and Stability for ABNB.
Bluegreen Vacations Holding Corporation (BVH)
BVH is a vacation ownership organization that manages resorts in both leisure and urban regions and advertises and sells vacation ownership interests (VOI). It also provides financing to qualified VOI buyers and management services for vacation clubs and homeowners’ associations.
BVH’s forward EV/EBIT multiple of 8.11 is 42.5% lower than the industry average of 14.10. Its forward Price/Sales multiple of 0.63 is 28.7% lower than the industry average of 0.88.
BVH’s trailing-12-month EBIT margin of 28.90% is 294.4% higher than the industry average of 7.33%. Its trailing-12-month EBITDA margin of 30.95% is 188.4% higher than the industry average of 10.73%.
In the second quarter that ended June 30, 2023, BVH’s total revenue increased 10.6% year-over-year to $260.62 million. Also, its sales of VOIs stood at $150.36 million, up 4.2% year-over-year. The company’s net income and EPS came in at $21.91 million and $1.34, up 23.2% and 54% from the prior-year quarter, respectively.
Analysts expect BVH’s revenue to increase 4.2% year-over-year to $957.58 million for the year ending December 2023. Its EPS is expected to grow 21.1% year-over-year to $4.24 for the same period. It surpassed EPS estimates in three of four trailing quarters.
The stock has gained 72.3% over the past nine months to close the last trading session at $35.67. The stock is currently trading above its 50-day and 200-day moving averages of $35.11 and $28.63, respectively, indicating an uptrend.
It’s no surprise that BVH has an overall B rating, equating to a Buy in our POWR Ratings system. It has a B grade for Sentiment, Value, Momentum and Quality. It is ranked #2 in the same industry.
Beyond what is stated above, we’ve also rated BVH for Growth, and Stability. Get all BVH ratings here.
The Marcus Corporation (MCS)
MCS together with its subsidiaries, owns and operates movie theatres, and hotels and resorts in the United States.
MCS’ forward EV/Sales of 1.22x is 34.3% lower than the industry average of 1.85x. Its forward Price/Sales of 0.73x is 41.2% lower than the industry average of 1.23x.
MCS’ trailing-12-month CAPEX / Sales of 5.44% is 35.4% higher than the industry average of 4.02%, while its trailing-12-month asset turnover ratio of 0.60x is 22.6% higher than the industry average of 0.49x.
For the fiscal second quarter ended June 29, 2023, MCS’ total revenue increased 4.3% year-over-year to $207 million. The company’s operating income increased 10.1% year-over-year to $20.81 million. Also, its net earnings increased 50.3% year-over-year to $13.47 million. Its EPS came in at $0.35, up 45.8% year-over-year.
Street expects MCS’ revenue to increase 4.8% year-over-year to $710.10 million for the year ending December 2023. Its EPS is expected to come in at $0.27 for the same period.
Over the past nine months the stock has gained 8.3% to close the last trading session at $16.50. The stock is currently trading above its 50-day and 200-day moving averages of $15.27 and $15.59, respectively, indicating an uptrend.
MCS’ strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system.
It is ranked #4 in the same industry. It has a B grade for Growth, Momentum and Quality. To see additional MCS ratings for Sentiment, Stability, and Value, click here.
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ABNB shares were trading at $138.16 per share on Tuesday morning, down $5.04 (-3.52%). Year-to-date, ABNB has gained 61.59%, versus a 17.45% rise in the benchmark S&P 500 index during the same period.
About the Author: Rashmi Kumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions.
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