The worldwide COVID-19 pandemic created a "new normal" for the travel industry, and it looks like that's the way it will stay for a long time. Normal now involves extensive social distancing, deep-cleaning protocols, and loss of amenities, such as spas. This is a crushing blow for many travel-industry companies but is benefiting others.

Extended Stay America (STAY) and Winnebago Industries (WGO -0.68%) are two companies that are benefiting more each day as consumers figure out ways to get out of the house to travel while still maintaining healthy circumstances. Investors recognizing the changing travel trends will benefit along with them.

American travelers no longer crave constant attention

Extended Stay America is emerging as a COVID-19-era hotel of choice for America. The company hasn't had to close down or make radical operational changes during the pandemic because its basic operating value proposition has always offered social distancing to customers. Occupancy during the pandemic has generally stayed above 60%, as many first responders were housed there, while the hotel industry in general saw occupancy fall to 20%.

The hotel chain has few common areas, and no restaurants or spas. Frequent cleaning in the small lobbies and common areas is easily accomplished and hasn't been a significant added cost. Guests have minimal contact with staff, as housekeeping is typically once a week. The guest suites offer small kitchens for eat-in meals, another social distancing plus in the current climate. According to the company, 84% of guests use the kitchen during their stay.

PLane in front of chart and numbers.

Image Source: Getty Images.

Extended Stay America locations are typically in outlying suburbs, making for attractive room prices, and in "drive-to" destinations where social distancing is easier. As a lower-end chain, Extended Stay America should benefit first from a travel industry recovery, as it is indexed more to leisure travel versus business.

Extended Stay America shares are down about 20% this year. By contrast, the S&P 500 Index is down 3%, and competitors Marriott International (MAR) and Hilton Worldwide Holdings (HLT), are down approximately 40% and 30%, respectively.

As economies reopen, I think Extended Stay represents a compelling opportunity. It has $700 million in cash, after drawing on its revolving credit line, and no significant maturities until 2024. 

In the first-quarter 2020, revenue-per-available-room (RevPAR) declined 5.8%, compared to 19% for the industry. The company reported RevPAR has rebounded from $31 in early April to over $42 in early June.

Extended Stay currently trades at a mere 8.7 times enterprise value to earnings before interest, taxes, depreciation, and amortization (EBITDA), compared to 35.61 a year ago.

This company is poised to lead the travel-industry recovery after a very difficult six months, and I think it merits a close look by investors before the stock takes off.

RV demand heats up as new owners hit the road or stay parked

Winnebago Industries is one of the dominant players in motor homes, travel trailers, fifth-wheel products, and boats, claiming 13.2% of North American RV retail market share. The company plans to report earnings June 24, and anecdotal evidence points to increasing demand for Winnebago products after the COVID-19-forced shut-down.

"Camping ... is the perfect COVID vacation," according to CNBC's Jim Cramer. "You can still practice social distancing, especially if you've got an RV. One of these things lets you shelter in place and travel at the same time."

Consumers have been cooped up for months as COVID-19 makes its way across America and are itching to travel again. Doing so in a motor home, where cleanliness can be controlled, has boosted recreational vehicle sales. Between 40% and 50% of units sold in May were to first-time buyers, versus a typical average of 30% to 35%, according to Michael Swartz of SunTrust Robinson Humphrey, citing what he called "one of the strongest dealer surveys we have conducted."

Mr. Swartz thinks justifying such a large purchase is easy given the lack of other leisure options during the coronavirus crisis. "That 20% down payment is probably similar to what you were paying for your kids' summer camp or your vacation, especially if you're not going to college football games or NFL games," Mr. Swartz said.

Recreational vehicle parked with a view of mountains.

Image source: Getty Images.

Consumers are reimagining what a recreational vehicle could mean to them. The "work-from-home" evolution touched off by the pandemic created an unexpected additional value in such a purchase. A number of RV buyers use their new RVs as their office and see a new "work-from-anywhere" scenario unfolding for themselves.

Winnebago's stock is up 28% year to date and is setting five-year highs at $67 per share. Its price-to-earnings (PE) ratio is 21, and price-to-sales (PS) ratio is 0.77, compared to 35 and 1.03, respectively, for the S&P 500, making Winnebago a very attractive investment choice at the current price.

The company's liquidity will allow it to take advantage of increased demand in 2020. Last quarter, Winnebago reported cash on hand of $122.9 million and access to a credit line of $192.5 million.

Winnebago competitor Thor Industries (THO -1.64%), maker of Airstream trailers, reported earnings June 8, beating estimates. Regarding current industry demand, Chief Executive Officer Bob Martin said, "Every North American dealer I have spoken to in the last few weeks has been very excited about the pace at which sales are picking up."

I expect we will hear even better comments and results when Winnebago reports June 24. While growth in the RV industry has been stealthily taking place lately, I think much more is on the way as America clamors to get out of the house. I especially like Winnebago right now because the company is diversified in both the camping and boating industries, just when each is about to take off.

What does this mean for investors?

With a potential second wave of coronavirus lurking, the travel industry is a very hard one to predict. But I think Extended Stay America and Winnebago are two of the best travel investments today, especially in the COVID-19 environment.

Americans still want to see family and friends but also want to do so in the safest way possible. Road travel keeps everyone away from crowded airports, and longer-stay hotels provide kitchens and minimal contact with staff. There's a new normal for American travel, but it works, and investors who recognize the trend will be well-rewarded.