Shares of travel stocks including Expedia (NASDAQ:EXPE), Booking Holdings (NASDAQ:BKNG), and Marriott International (NASDAQ:MAR) were moving higher last month as macroeconomic tailwinds boosted the sector. According to data from S&P Global Market Intelligence, all three stocks rose by double digits -- Expedia climbed 16%, Booking increased 13%, and Marriott gained 12%.
The sector benefited from a softening stance from the Federal Reserve, which could encourage more consumer discretionary spending, and a thawing in trade tensions with China and Mexico, which should help boost the overall global economy.
As the chart below shows, the stocks mostly rose in tandem throughout the month, gaining alongside the S&P 500, which added 6.9%.
The biggest day in June for the group of stocks came on June 4 when Expedia gained 3.4%, Booking rose 5.8%, and Marriott tacked on 3.1%. The S&P 500 jumped 2% that day on words from China's Commerce Ministry encouraging negotiations, and comments from Fed Chair Jerome Powell, who said that he would be amenable to lowering benchmark interest rates if the trade tensions spilled over to affect the greater economy.
Travel stocks tend to be more sensitive to economic signals because they are dependent on business growth and consumer discretionary spending, especially heading into summer, the peak travel time of the year.
Additionally, Booking surged on June 4 after getting an endorsement from a pair of investment banks. Goldman Sachs listed Booking among a dozen stocks that it saw as being well suited to outperform in an environment of uncertainty and trade tensions. Guggenheim, meanwhile, said that Bookings' listings have been growing, a sign that the company could top its own conservative guidance for the year.
Expedia did not receive any such upgrade last month, but the U.S.-focused online travel agency may be the biggest winner from changes in the macro outlook. The company is focused on expanding its campuses in Seattle and Austin, showing its commitment to attracting top talent.
Marriott, the world's biggest hotel company, has caught the attention of investors as it's transitioned to an asset-light model through franchising, and focused on home-sharing and experiences in order to fend off competition from Airbnb.
While Expedia, Booking, and Marriott are all affected by similar macroeconomic forces, the three companies are facing different challenges. Investors in Booking, whose biggest market is Europe, should keep an eye on Brexit-related turmoil as a hard Brexit, which has been delayed until at least October, could roil the British economy and that of greater Europe.
Expedia, meanwhile, needs to show that it still has ample growth remaining in its VRBO home-sharing business, which also includes Homeaway, after gross bookings growth in the segment slowed to just 5% in the first quarter. Expedia has been focused on a rebranding of that segment under VRBO, which could help accelerate growth.
Finally, Marriott is seeking to stave off competition from home-sharing sites, and could also make another blockbuster acquisition, following its successful takeover of Starwood Hotels & Resorts.
Through July 9, all three stocks have traded flat this month, underperforming the S&P 500, a sign that investors shouldn't read too much into last month's gains. Trade tensions and macroeconomic growth should continue to dictate the stocks' movements until we hear quarterly updates from each company in another month.