TripAdvisor (NASDAQ:TRIP), Hyatt Hotels (NYSE:H), Marriott International (NASDAQ:MAR), Booking Holdings (NASDAQ:BKNG), and Alaska Air Group (NYSE:ALK) were all getting shellacked on Thursday. Each and every name on this list fell 10% or more in the opening hours of trading. As of 11:20 a.m. EDT, TripAdvisor remains down 11.1%, Hyatt 13%, and Marriott a more moderate 7.4%. Booking Holdings is off 8%, and Alaska Air 8.6%.
Last night, President Trump made a televised announcement of a raft of measures designed to stabilize the American economy and protect the populace from the expanding threat of the COVID-19 coronavirus, ranging from loan support for small businesses to free coronavirus tests from the medical industry, to a 30-day ban on most immigrants and nonimmigrants traveling from many European nations.
That last one crashed travel industry stocks today.
It's important to note that while this sell-off may be a justified response to a very serious situation, it is not 100% rational.
Yes, the travel industry will be affected by a ban on travel. That's painfully obvious. But to focus on just the most obvious example of irrationality, I kind of doubt Alaska Air Group does a whole lot of business flying travelers between the Netherlands and New York, or that it will lose a ton of revenue from a ban on travel from Europe. Regardless, Alaska Air Group is now down 9%. (Yes, it's gotten worse in just the few minutes since I started writing this article).
That observation may provide cold comfort to investors nursing some very bad wounds on their portfolios today. But here's the upside to all of this stock market downside: Panic and irrationality are almost certain to reveal some incredible bargains at the end of this sell-off. Babies will be throw out with bathwater, and in the end, we will find gems hidden amid the rubble. Now's the time for all true long-term investors to sharpen pencils diligently, work valuations carefully, and find those bargains!