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The post-pandemic travel boom is projected to continue into this year’s holiday season as an increasing number of Americans plan to go on leisure trips. Multiple airlines have already announced their plans to handle record air traffic, and hotels are gearing up to welcome guests.
Given this scenario, it would be ideal to invest in hotel stocks like Civeo Corporation CVEO, Hilton Grand Vacations HGV and InterContinental Hotels Group PLC IHG, which are expected to benefit in the near term.
Americans Gear Up to Travel
Nearly 48% of Americans plan to hit the roads between Thanksgiving and mid-January compared to 31% in 2022, according to a Deloitte survey. Of those traveling, 56% plan to stay in hotels, a solid jump from last year’s 35%.
Also, holiday budgets are up although the trip duration has shortened marginally. An average traveler plans to shell out $2,275. Moreover, those traveling plan to spend 15% more on leisure travel this holiday season compared to 2022.
Baby boomers are expected to significantly contribute to the increase in travel this season. While they made up only one-fifth of the traveling population during the holidays in 2022, it is expected that this year, their proportion will rise to nearly one-third.
Millennials are planning an average of 2.2 trips over the holidays, while Gen Z travelers are planning an average of 2.1 trips. Notably, one in four Gen Z travelers plans to significantly increase the budget from 2022, marking the highest proportion among all generations.
This comes as the AAA expects that at least 55.4 million travelers will embark on journeys of at least 50 miles from home during the Thanksgiving period alone, up 2.3% from 2022.
Price pressures have been posing a major challenge for consumers and the travel and leisure sector. Hotel rooms are pricier, which was already 0.8% higher in October compared to the same period in 2022.
The pandemic saw the travel industry taking a major hit, with airlines and hotels suffering the most. However, the pandemic fears appear to be over and people are willing to travel and spend more despite high prices. Last year, one in five nontravelers cited health concerns following the pandemic. This year, the number halved with one in 10 nontravelers saying that they want to avoid trips for the same reason.
Our Choices
Hotels are poised to benefit from the significant jump in the number of travelers who plan paid lodging. Thus, investing in hotel stocks would be a prudent choice.
Civeo Corporation is a provider of long-term and temporary remote site accommodations, logistics and facility management services. CVEO operates in active oil, coal, natural gas and iron ore producing regions, including Canada, Australia and the United States.