What happened 

Shares of travel and leisure stocks were up broadly on Thursday as investors piled back into the industry. The omicron variant-related sell-off last week appears to have been overdone and now investors are moving back into stocks that sold off

Three of the most notable movers today were MGM Resorts International (NYSE:MGM), which was up as much as 7.6%, Marriott International (NYSE:MAR), which climbed as much as 7.1%, and Sabre Corporation (NASDAQ:SABR), which jumped 12%. The stocks were up 7.1%, 6.8%, and 10.8% respectively at 3 p.m. ET. 

Two people walking through an airport with bags.

Image source: Getty Images.

So what 

The omicron variant has been found in the U.S. and even the most restrictive states in terms of the pandemic don't appear to be flinching. California Gov. Gavin Newsom said he didn't anticipate new lockdowns in the state, which could mean that travel to places like Las Vegas will continue unhindered.

On a federal level, President Joe Biden is urging vaccinations and boosters, but also doesn't appear to be pushing for lockdowns. He outlined plans to expand the availability of boosters and is working with pharmaceutical companies to speed any other treatments or vaccines that may be necessary.

While the recovery today may seem big, you can see below that these stocks are all down sharply over the last few months as concern about the spread of COVID-19 heading into winter months has grown and in general interest rates have been on the rise. Put in that context, today's move is a blip on the chart. 

MGM Chart

MGM data by YCharts

Now what 

The market can't seem to find a direction in some sectors and travel and leisure is certainly one of them. An increase in COVID-19 cases in the U.S. and around the world generally is certainly a negative because a subset of people will choose to travel less or spend less money when they do go out. On the positive side, consumers and businesses seem more willing to operate normally even as the pandemic continues. 

A big difference between the reaction this year and last year is the availability of multiple vaccines and other treatments for people who do get sick. That's caused more people to be comfortable traveling and going out in general even though COVID-19 has spread. For example, Las Vegas is reporting all-time record gambling revenue, despite not being back to full capacity during the week due to a lack of conventions. 

At the end of the day, the variant is worth keeping an eye on, but long-term we should see more recovery in travel and leisure stocks as spending resumes to more normal levels. 

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.