The coronavirus pandemic forced people to spend much more time at home than they would like to over the last couple of years. Thankfully, the world has progressed against COVID-19, making people feel safer leaving their homes more often.
Folks are now preferring to spend their dollars on away-from-home experiences like taking a trip to a Disney (DIS -0.07%) theme park or booking a getaway on Airbnb (ABNB -2.57%). Fortunately, it's not too late for investors to add these sensational stocks to their portfolios.
Guests are spending more at Disney parks
The Disney segment that includes its theme parks has been thriving for a few quarters now. In its most recent quarter, which ended on April 2, revenue more than doubled year over year to $6.6 billion. Disney highlighted that consumer spending at the theme parks is up 40% compared to the same quarter in 2019, before the outbreak. It's great news for Disney that guest spending is surging even before the popular summer season.
Management changed operations while it was forced to temporarily shut the turnstiles at the pandemic's onset. Those adjustments, which include mobile ordering at restaurants and concessions, contactless hotel check-in, a digital reservation system, and a premium service allowing guests to pay to skip lines, are all working together to boost the guest experience and profitability.
DIS PS Ratio data by YCharts
Interestingly, Disney's stock is down 39% year to date in 2022, even as the company gains momentum through the economic reopening. The stock is trading inexpensively and is poised to benefit from consumers unleashing pent-up demand over the summer.
Folks are unleashing pent-up travel demand
Worldwide travel pulled back significantly after the outbreak of COVID-19. Folks who did not need to travel canceled their trips, while others refrained from booking any future vacations. Airbnb's revenue fell 30% in 2020 as a result. Thanks to momentum on vaccinations against the coronavirus, consumers are increasing their travel spending again.
ABNB Cash from Operations (Quarterly) data by YCharts
Although spending on hotels and resorts plummeted by nearly $900 billion in 2020, it bounced higher by $340 billion in 2021. Still, overall spending was roughly $500 billion below pre-pandemic levels. Probably, consumers will further close that gap in 2022. Moreover, given the pent-up demand for travel, it would not be surprising if spending surpasses the 2019 total of $1.5 trillion in the near term.
ABNB Price to Free Cash Flow data by YCharts
Airbnb's revenue has already surpassed 2019, and its cash flow is rising even faster. Like Disney, Airbnb's stock does not reflect this positive momentum. It's trading at a price-to-free-cash-flow multiple near the lowest it's been in the previous three years, making this an excellent time for long-term investors to scoop up shares of this sensational summer stock.
