3 Travel Stocks Ready to Take Off to the Upside

The thought of adding travel stocks to your investing plans probably sounded like a risky idea back in 2020, given how the entire industry faced so much uncertainty. The pandemic put a major dent in most people’s travel plans and has certainly caused lingering impacts, yet things might start to be looking up for companies in the industry. For example, the United States recently eased travel restrictions for vaccinated international travelers, which could lead to a major uptick in air traffic and bookings. There’s also plenty of pent-up demand from Americans that should drive earnings higher for companies that offer travel-related products and services.

All of this adds up to a bull case for travel stocks, which is why we’ve put together the following list of 3 travel stocks that could be ready to take off to the upside. While there are still some questions marks about what the travel industry will look like in a post-pandemic world, investors can rest assured that they own quality names by focusing on these standout companies.

Expedia (NASDAQ: EXPE)

This is one of the world’s largest online travel services companies, which means that Expedia will be one of the biggest beneficiaries of a strong rebound in the industry. The company offers a wide selection of travel products and services with its well-known platforms like Expedia, Hotels.Com, and Hotwire. Travelers can use Expedia to conveniently handle all of their trip planning needs like booking airline tickets, hotel reservations, car rentals, cruise arrangements, and destination services.

Investors can use the latest earnings reports from travel companies like Expedia to get an indication of how quickly travel volumes are rebounding. If Q3 is any indication, things are certainly looking up for travel-related businesses. Expedia reported Q3 gross bookings of $18.7 billion, up 117% year-over-year, and saw its revenue jump by 97% year-over-year to reach $2.96 billion. It’s worth mentioning that in Q3, Expedia’s net income and adjusted EBITDA almost matched Q3 2019 levels, which is certainly a good indication that the company’s business could be returning to normal.

Airbnb (NASDAQ: ABNB)

Next up is a company that is disrupting the travel industry with its unique global platform that connects people who want to rent out their homes with travelers that are looking for accommodations. As the world’s largest online alternative accommodation travel agency, Airbnb should continue to benefit from strong volumes on its platform as people hit the road again after the pandemic. One could also argue that the company’s unique business model is taking plenty of market share from major hotels and will lead to strong earnings growth over the long term, especially with the travel industry starting to get back to normal.

Airbnb just reported stellar Q3 earnings that could be a strong catalyst for the stock price in the coming weeks, especially given that the stock has been consolidating for most of 2021. The company reported record Q3 revenue of $2.2 billion, up 70% year-over-year, and delivered its most profitable quarter even with a net income of $834 million. Even though travel volumes might be up and down as the industry gets back on its feet, this phenomenal quarter is a sign of good things to come from Airbnb, which is why investors should consider adding shares in the coming sessions.

The Walt Disney Company (NYSE: DIS)

Finally, The Walt Disney Company is a strong blue-chip travel name for investors to consider at this time, especially if the stock can reclaim the 200-day moving average in the coming weeks. Disney is arguably the strongest entertainment brand in the world, and investors should love what the company is doing with its direct-to-consumer offerings. The Disney+ streaming platform has been a true revelation for the company, with paid subscriber growth exceeding 100% year-over-year in Q2. Investors should expect this to be a major earnings growth driver going forward, especially when you consider that the company also owns the ESPN+ and Hulu streaming platforms.

On the other hand, the company’s theme parks and cruises business segment has taken a big hit since the onset of the pandemic, which means there is rebound potential to consider there as people feel more comfortable with traveling again. Disney will report its Q4 earnings on November 10th, so make sure to check the report for confirmation that this area of the company’s business is coming back strong. According to MarketBeat, the consensus analyst estimate for Disney’s Q4 earnings is $0.75 EPS, and a beat wouldn't be surprising given the other positive reports we have seen from travel companies thus far.