Vacation Variants

Travel Indicators Mark Different Recovery Paths

2021年8月24日
4 min read

As the summer progresses, US vacationers are out in force while the European and Asian holiday scene remains relatively subdued. Identifying travel-related trends can help investors capture the global recovery from the pandemic mobility shutdown in diverse sectors.


COVID-19 has accelerated many behavioral changes for consumers. But one tradition—vacations—is highly unlikely to change. If anything, we believe the suppressed travel of the last 18 months is likely to give way to a travel boom when people feel safe to get back on trains and planes and to stay in hotels. The recovery of travel around the world is unlikely to be uniform. But with the help of big data, we can observe how vacation appetites are playing out in real time this summer and develop actionable investment insights.  

Major Milestone in US Hotel Bookings

Travel has recovered in fits and starts so far. In the US, a major milestone was reached over the July 4 holiday as passengers screened at US airports exceeded pre-pandemic levels for the same week in 2019 (Display, left). Hotel bookings confirm the US recovery.

For example, higher prices at US hotels have helped offset volumes that remain slightly below 2019 levels. As a result, RevPAR, a measure of nightly revenues to the hotel industry per available room-night, has been steadily rising and briefly exceeded the pre-COVID-19 level in July (Display, right)—well before many Americans are comfortable traveling. Good luck getting a holiday hotel reservation!

US Travel Indicators Rebound Sharply, Europe and Asia Remain Subdued
Line charts show the recovery in US passenger traffic at airports and hotel revenue per room in the US, China, Asia and Europe.

Past performance does not guarantee future results.
Left display through July 29, 2021; right display through July 18, 2021
*TSA passenger throughput is based on the number of passengers crossing through the Transportation Security Administration’s checkpoints at US airports. 
†RevPAR is the total room revenue divided by the total number of available rooms. Chart compares RevPAR in 2021 with the corresponding week in 2019 to account for the seasonality of travel trends. Europe includes the UK, France, Italy, Germany and Spain. Asia (ex China) includes Japan, South Korea and Singapore.
Source: Morgan Stanley, STR, US Transportation Security Administration and AllianceBernstein (AB)

But the reopening trends seen in the US aren’t universal. Europe and Asia are still suffering from depressed levels of activity and the travel and leisure industry may be facing another “lost summer.” Indeed, RevPAR statistics for Europe and Asia are still down sharply from 2019 levels.

From Vaccinations to Vacation

As investors, our goal is to anticipate what happens next, with an awareness of appropriate timeframes. Looking at vaccination rates by country as well as Google searches for vacation-related topics provides insights.

Vaccination rates in the US were initially well ahead of the rest of the world. By April 30, 44% of the US population had received at least one dose of a vaccine, according to Our World in Data. This compared to rates of around 25% in Western Europe. But by the end of June, the US and Western Europe both recorded similar one-dose vaccination rates of approximately 55%.

While the Delta variant is causing COVID-19 cases to rise around the world, when we are on the other side of this spike, we believe Western Europe will start to look more like the US in terms of mobility and activity. This possibility isn’t well recognized today. In fact, Google searches for vacation-related topics have recovered worldwide to about 75% of their pre-pandemic peak. But it varies by country, with interest in Germany and South Korea surging, Spain and the US near pre-pandemic peaks, while Australia and the UK still show little interest in holiday-making.

Internet Searches for Vacation-Related Topics Are Rebounding
Google Search Interest for Vacation Topic: Percent vs. Peak for Period Shown
Left chart shows global Google search interest for vacation topics since 2019. Right chart shows current interest in 12 countries.

Past performance does not guarantee future results.
Through July 31, 2021
Vacation topic is defined as vacation-related searches corrected for misspellings or other variations such as searches for “holidays.” Numbers represent search interest relative to the highest point on the chart for the given region and time. A value of 100 is the peak popularity for the term. A value of 50 means that the term is half as popular. A score of 0 means there was not enough data for this term.
Source: Google Trends 

Investment Insights: Beyond “Pure” Travel and Leisure 

So how do these data-driven insights translate to portfolio actions? It all depends on an investor’s risk appetite. Cruise ships, airlines and hotels might seem like the obvious way to invest in a travel rebound. But these companies are the higher risk, higher reward options; if a new variant emerges post delta, the recovery would be pushed out again and “pure” travel stocks would face a setback.

Instead, look for strong businesses that are likely to enjoy an added boost from a normalization of vacationing. This is a lower-risk approach, targeting companies outside the transport and leisure industries that also benefit from renewed travel.

Some financial services companies are important enablers of travel. When cross-border travel picks up, vacationers will use their credit cards for more purchases in foreign currency. Cross-border transactions are very profitable for credit card companies. In Europe, a revival of leisure travel would also boost regional payment activity.

Travelers love to shop. Several luxury-brand companies have historically enjoyed solid revenue gains from tourists. Easing travel restrictions could provide a brisk sales boost for products from cosmetics to swanky handbags. This could be a boon to luxury goods companies, especially given the pent-up spending power accumulated during last-year’s pandemic shutdown.

Vacationers on the move are an important sign of a return to normalcy in the global recovery. Investors should follow trends in regions that haven’t fully recovered to identify companies with solid businesses in diverse industries that are poised to enjoy an added boost from a return to travel. The absolute upside might not be as exciting as investing in companies that are direct winners from a binary travel boost; yet, we believe the risk-adjusted return potential is more attractive by pursuing great businesses that will get even better as people hit the road again.

The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams. Views are subject to revision over time.

References to specific securities are presented to illustrate the application of our investment philosophy only and are not to be considered recommendations by AB. The specific securities identified and described do not represent all of the securities purchased, sold or recommended for the portfolio, and it should not be assumed that investments in the securities identified were or will be profitable.

Investment involves risk. The information contained here reflects the views of AllianceBernstein L.P. or its affiliates and sources it believes are reliable as of the date of this publication. AllianceBernstein L.P. makes no representations or warranties concerning the accuracy of any data. There is no guarantee that any projection, forecast or opinion in this material will be realized. Past performance does not guarantee future results. The views expressed here may change at any time after the date of this publication. This article is for informational purposes only and does not constitute investment advice. AllianceBernstein L.P. does not provide tax, legal or accounting advice. It does not take an investor's personal investment objectives or financial situation into account; investors should discuss their individual circumstances with appropriate professionals before making any decisions. This information should not be construed as sales or marketing material or an offer of solicitation for the purchase or sale of, any financial instrument, product or service sponsored by AllianceBernstein or its affiliates. This presentation is issued by AllianceBernstein Hong Kong Limited (聯博香港有限公司) and has not been reviewed by the Securities and Futures Commission.


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