We recently published a list of 10 Best Travel Stocks To Buy Right Now. In this article, we are going to take a look at where Travel + Leisure Co. (NYSE:TNL) stands against other best travel stocks to buy right now.
The State of International Tourism in 2024
According to a report by UN Tourism published on September 19, international tourism revived back 96% of the pre-pandemic levels during the first seven months of 2024. Around 790 million tourists were traveling around the globe during the said time, which is 11% greater than that in 2023 but still 4% less than in 2019. As per the report, the key drivers of this growth have been a strong demand for travel in Europe and also the re-opening of markets in the Asia Pacific region.
The Secretary-General of UN Tourism, Zurab Pololikashvili noted that the growth in international tourism has been in line with the projections made by the department. He mentioned that the sector is on its way to achieving full recovery from the biggest crises in history and that too in an environment of economic and geopolitical challenges. Pololikashvili suggested that the recovery highlights the growing demand for international tourism planning and managing companies to cater to the revival in a way that benefits the communities through inclusive and sustainable policies. In addition, to an increase in tourism, the air connections have also improved along with an easing in visa restrictions.
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The report also highlighted that increased air connectivity and visa facilitation have supported the recovery. Data collected by the UN World Tourism Barometer showed that the Middle East remained the strongest region relative to others as it surpassed the 2019 levels by 26% during the first seven months of 2024. Moreover, Africa also remained strong and hosted 7% more tourists than in 2019. On the other hand, Europe and the Americas which host the most tourists combined recovered 99% and 97%, respectively. Despite the robust growth, certain challenges remain unaddressed including geopolitical challenges, extreme climate conditions, and high inflation in certain regions of the world. Regardless, the report anticipates continued recovery and expects strong revenue from international tourism to persist for a long period.
Our Methodology
To compile the list of the 10 best travel stocks to buy right now, we used the Finviz stock screener. Using the screener we aggregated a list of travel services stocks sorted by market capitalization. Next, we ranked these stocks based on the number of hedge fund holders as per Insider Monkey’s third-quarter 2024 database.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Coastline resort properties with the iconic beach umbrellas and sunbathers in the foreground.
Travel + Leisure Co. (NYSE:TNL)
Number of Hedge Fund Holders: 32
Travel + Leisure Co. (NYSE:TNL) is a membership and leisure travel company that primarily focuses on vacation ownership and travel services. It sells vacation ownership interests (VOIs), which allow individuals to purchase the right to use a vacation property for a specific time each year. The company also manages various resorts, providing services such as housekeeping, maintenance, and reservation management for property owners, while providing financial assistance to customers purchasing vacation ownership interests.
Travel + Leisure Co. (NYSE:TNL) has identified an embedded revenue potential of over $19 billion over the next decade, driven by its strategy to grow the new owner base. New owners spend significantly more than their initial purchase, providing a consistent revenue stream. During the fiscal third quarter of 2024, the company increased its new owner sales mix to above 35%, while the revenue from Vacation Ownership increased 2% to $825 million compared to the same period last year, driven by a 4% increase in tours and a 9% rise in new owner tours.
Currently, the average age of their owners is in the mid-50s. However, management noted that sales to younger generations, such as Gen X and millennials, are increasing. This trend suggests a growing interest in vacation ownership among younger consumers. Moreover, the company reported strong performance from existing owners during the quarter. Its Volume Per Guest (VPG) exceeded $3,000, nearly 30% higher than pre-pandemic levels in 2019, indicating that customers value their ownership more than ever. It is one of the best travel stocks to buy right now.
Overall, TNL ranks 10th on our list of best travel stocks to buy right now. While we acknowledge the potential of TNL to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TNL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.