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Top travel companies to invest in as recovery is well-underway

Top travel companies to invest in

Travel and tourism sector was significantly impacted by the COVID-19 pandemic and this industry continues to recover from pandemic’s aftermath. Nevertheless, data released by United Nations World Tourism Organization (UNWTO) exhibited that the global travel sector touched ~80% of pre-pandemic levels. Pandemic resulted in ~62 million layoffs, and despite this, industry’s job creation continues to grow at ~23% on an annual basis. Even the top travel companies saw deteriorating conditions, impacting their revenue and profit figures. 

Revenge travel has been categorised as one of the major factors of recent rebound in entire travel industry. With people compensating for time and opportunities which they lost during pandemic, top travel companies are expected to now benefit in FY24. Furthermore, easing of lockdown restrictions and travel restrictions in China had strong impact and China is responsible for ~11% of annual online travel market growth.

Chinese online travel agency Group Limited saw its net income grow by ~180% year-over-year in 2Q. This global company saw ~22% improvement against 1Q. Second-quarter results of the company highlighted the travel industry as outbound hotel and air reservations saw a recovery of ~60% to pre-pandemic levels. Air ticket bookings on the company’s online travel agents platform doubled to pre-pandemic levels. 

As per the recent report released by International Air Transport Association (IATA), the airline industry’s profitability should touch ~$9.8 billion by year end against prior forecast of ~$4.7 billion. On top of that, industry revenues should be ~10% up from 2022 levels. 

With this in mind, its time to look at top travel companies to invest in as recovery in this industry seems well-underway.

1. TripAdvisor, Inc.

The company has been categorised as the world’s leading travel metasearch company. 

It has announced financial results for 2Q ended June 30, 2023, with revenue of $494 million, exhibiting a rise of ~18% year-over-year. Net income of the company came in at $24 million, or $0.17 diluted EPS. The company delivered healthy revenue growth on consolidated basis, most notably in experiences offerings. Its experiences category saw a significant outperformance, while rest of the businesses delivered largely within the expectations with the exception of its European-sourced hotel revenue. 

The company has initiated cost savings actions which should provide flexibility in prioritizing its strategic investment as it finishes 2023, plans for 2024, and accelerate path to long-term financial objectives.

As of June 30, 2023, it had ~$1.1 billion of cash and cash equivalents, exhibiting a rise of $120 million from December 31, 2022. This was mainly supported by positive operating cash flows, inclusive of IRS audit settlement payment of $113 million during 2Q23. This was earlier disclosed in prior quarters. 

In 3Q, for Tripadvisor Core, the company expects low-single digit year over year revenue decline, as a result of trends it saw in 2Q, particularly in branded hotels. In Viator, it expects year over year revenue growth in low 30% range. This is expected to stem from monthly step down through quarter from 2Q growth rates. 

2. Travel Leisure Co.

The company is a membership and leisure travel company which has a portfolio of several travel brands.

It has released 3Q23 financial results for 3 months ended September 30, 2023. Net income of the company came in at $110 million, $1.49 diluted earnings per share from continuing operations, while net revenue was $986 million. Adjusted EBITDA of the company was $248 million and adjusted diluted EPS came at $1.54. The year-over-year growth of the company’s cornerstone vacation ownership business demonstrated strength of its business model. 

Vacation Ownership revenue saw an increase of 8% to $812 million in 3Q23 in comparison to same period in previous year. Net vacation ownership interest (VOI) sales came in at $433 million in 3Q in comparison to $403 million in the prior year period. Gross VOI sales were $598 million against $555 million in previous year. 

As of September 30, 2023, its leverage ratio for covenant purposes came in at ~3.7x. It saw $3.7 billion of corporate debt outstanding as of September 30, 2023, and this excluded $1.9 billion of non-recourse debt associated to the company’s securitized notes receivables portfolio. 

For FY23, the company forecasts adjusted EBITDA of $900 million – $915 million and gross VOI sales of $2.15 billion – $2.2 billion. For 4Q23, it expects adjusted EBITDA of between $233 million – $248 million and gross VOI sales of $541 million – $591 million. 

3. Copa Holdings, S.A.

The company has been categorised as a leading provider of airline passenger and cargo service. It executes its operations through its subsidiaries.

It announced its financial results for 2Q23, reporting net profit of US$17.5 million or US$0.44 per share. Operating profit of the company came in at US$194.7 million and ~24.1% operating margin for 2Q23 in comparison to operating profit of US$42.3 million and operating margin of 6.1% in 2Q22.

Total revenues for 2Q23 went up by 16.7% to US$809.2 million, mainly due to higher capacity, while yields rose 2.0% to 13.3 cents. Revenue per available seat mile (RASM) saw an increase of 2.7% to 12.0 cents in comparison to 2Q22. The company closed 2Q23 with ~US$1.3 billion in cash, short-term and long-term investments, exhibiting ~39.6% of last twelve months’ revenues. 

For 2023, the company expects that consolidated capacity should grow in the range of 12% – 13% against 2022, and operating margin is anticipated to come between 22% – 24%. 


While above are some of the top travel companies to be considered for investments because of the ongoing recovery, there are several other companies operating in the travel and tourism sector which are expected to perform well. 

Some of the top travel companies are expected to benefit from recovery in cruise industry. This industry has been categorised as one of the fastest growing segments of industry. As per Cruise Lines International Association (CLIA) outlook, passenger volume for cruise lines should be more than 100% of the 2019 levels with 31.5 million passengers in 2023. By 2027, the association expects that  passenger volume should reach ~40 million. 

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