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Don't Wait! The Time to Book Your 2021 Summer Vacation Is Now

By Lou Whiteman - Jan 6, 2021 at 8:00AM

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Travel companies could see a surge of demand come summer.

Let's face it: 2020 was a tough year for a lot of different reasons. The inability to take a good vacation is pretty far down on the list of what went wrong, but after a year of working from home and obeying travel restrictions a lot of people are hoping to get moving once a vaccine is widespread.

That would be good news for airline stocks like Delta Air Lines ( DAL -7.38% ) and Southwest Airlines ( LUV -4.17% ), along with a large number of other travel companies. But consumers who are looking to take a trip better not delay for too long.

During his Dec. 14 Motley Fool Live appearance on "The Wrap," Motley Fool contributor Lou Whiteman explains to host Jason Hall why it is a good idea to start planning now if you hope to take a vacation this summer. 

 

Jason Hall: Lou, you say we need to start get our vacations booked. What's going on here?

Lou Whiteman: Well, let's playoff that theme of the vaccine. Let's just say just for my sake, even if you don't believe that, tell me it's all going to work out because I need to hear it. If so, there is a decent chance a lot of us will have the vaccine by next summer. If you, like so many other people, are thinking, "God, I want to get out of my house." It's time to start looking now because it's shaping up as a crazy summer.

Some numbers for the U.S. Travel Association, in a typical year, U.S. travel spending grows between two and four percent annually. Total travel spending, depending on the year. It's going to be down about 45% in 2020, which probably isn't a surprise, but they are expecting a pretty nice rebound 23% up in 2021. I was just reading a story in The Telegraph about European travel, a lot of resorts in the Mediterranean are already sold out for the summer of 2021. In actual dollar amount, we're still looking at 2024 before we really make up for the pandemic. It's a $1.1 trillion industry, just U.S. travel, but there's two takeaways here. For one, back to this investing thing, I really believe in terms of sheer volume numbers, travel, airlines are going to be a surprise in 2021 to the upside, I think volume is going to come back faster than we think, and stocks will probably, but your guess is as good as mine, react accordingly. But who cares about stocks? Who cares about investing? We all need a vacation. Don't sleep on it, book now because you want to do a trip next summer and there's going to be a lot of sellouts if we get into February, March, April when things are going well.

Jason Hall: Yes, I think it's true. I think there's massive pin up demand that's going to realize. People, they're not going to get the vacation they want, or they're going to pay twice as much because these places a lot of going to able to charge pretty much what they want. That's very good advice.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Southwest Airlines Co. Stock Quote
Southwest Airlines Co.
LUV
$42.55 (-4.17%) $-1.85
Delta Air Lines, Inc. Stock Quote
Delta Air Lines, Inc.
DAL
$33.53 (-7.38%) $-2.67

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