While the COVID-19 pandemic has been good for markets such as work from home technologies, vaccines, and even pet care, there has been one market in particular that has taken quite the beating. With travel restrictions and lockdowns worldwide, we have seen the battering of travel and hospitality, and the devastating loss of jobs within these industries. But, with vaccine rollouts charging ahead globally, there is now light at the end of the tunnel and the industry is bracing for a wave of “revenge travel.”1
Vaccinated, bags packed, and ready to go
In the past few months, the likes of hospitality markets such as Hilton Worldwide Holdings Inc., Hyatt Hotels Corp., DiamondRock Hospitality Co., Marriott International Inc., and Wyndham Hotels & Resorts Inc. have started to see a rebound in the value of their stocks. With vaccine-aided herd immunity becoming a reality, many are gearing up to travel further than their local supermarket, with this resurgence in travel offering a potential opportunity for investors.
When travel restrictions eased on May 17th, the UK saw airports packed with eager travellers jetting off for some much-needed rest and relaxation2. This initial response to the easing of rules provided a sneak peek into what’s to come as quarantine-free travel starts to return.
Hotels vs homestays
As summer began and the school holidays hit, holidaymakers seized travel freedom despite confusing travel rules. Airlines increased flights and in Europe, hotel booking momentum is now above 60% the level it was pre-pandemic3, giving the industry hope for a return to better times. After a year and a half of staying put, there is money saved up for the holidays, and people are ready to spend it.
Hotel lodgings still dominate as the most popular choice of accommodation, with 85% of summer holidays including hotels, compared to 23% that will instead opt for private rentals such as Airbnb4. Stringent hygiene procedures and enhanced safety measures to counter the spread of the coronavirus are regaining the trust of the now cautious traveller and injecting confidence back into the hotel accommodation experience.
Is it check-in time?
While stocks in these hotel markets may not yet be what they used to be, could investing in these stocks prove fruitful for the long game? When there is uncertainty, there is risk, and bear in mind, we are not out of the coronavirus woods just yet.
The trajectory of these markets paints a hopeful picture, and many in the hotel industry will undoubtedly be keeping their fingers tightly crossed as vaccine visibility continues to increase, hoping that guests will return to make up for lost time and lost holidays.