The travel industry has been in serious trouble this year. With COVID continuing to be a threat, traveling is the last thing on people’s minds (me included). Because of this, I do not like travel stocks here at all, and I think they will get worse before they get better, despite Americans somewhat getting back to traveling. I’ve heard inklings of people beginning to travel, and it’s possible it may experience a slight bump into the holidays, but at this point, we are two months away from Thanksgiving and the landscape could change substantially by then, so it’s not something I would be on right this moment. Airliners are too weak as are cruiseliners.
When would I buy?
I would consider buying some USO if travel began to pick up, but I still don’t think it’s time. EXPE looks better than the air and cruiseliners but I don’t like to pick stocks based on the “it doesn’t look completely awful” mentality. I like relative strength and consumer trends and neither of those is showing here. The one opportunity I see in travel is an Airbnb IPO. While Airbnb has experienced a loss in revenue as well, Airbnb relatively has held up when compared to traditional hotels, airlines, and cruise companies. There is an argument to be made that perhaps EXPE could benefit from staycations and holiday travel, but I wouldn’t want to put too much capital in it. For traders and investors looking to buy beaten-down stocks, this is really the only opportunity I see – but as I’ve said I just don’t think now is the time. When the time comes, I will stick with EXPE and whichever airliners make it out of this mess, but it is too soon to say which ones those are – but for the long term I’m eyeing LUV and ALK.
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