Investing in Travel and Tourism Stocks

It's easy to be bullish on travel and tourism stocks. In the wake of the pandemic, travel and tourism has emerged as a top growth industry. Who couldn't use a vacation right now?

U.S. travel spending dropped by 42% in 2020. But by early 2024, U.S. domestic travel spending was above pre-pandemic levels, and business travel has been growing, even with video conferencing tools having made remote meetings more advantageous in many circumstances. U.S. travel spending has historically grown between 2% and 4% annually, according to the U.S. Travel Association.

International travel is a different story. Spending fell by 76% in 2020 and is only just getting back to 2019 levels in 2024, according to the World Tourism Organization. Still, it’s safe to say there’s significant pent-up demand to travel again, and eventually overseas tourism will make a bigger comeback.

Travel and tourism is a broad category with a diverse list of well-known brands. For people planning to invest money in travel companies, you have plenty of options.

Best travel stocks

Best travel stocks to buy in 2024

There's a wide range of transportation, lodging, and amusement companies to get you to your destination and make sure you enjoy your stay. Since the companies vary so much, it's hard to nail down a single key metric to watch. For example, some travel companies are asset-heavy transportation businesses (like the airline industry and airline stocks, which are suffering a number of issues right now, especially in the U.S. due to Boeing's (BA -1.02%) woes); other top picks are essentially tech companies.

The best travel and tourism stocks do share some traits, though -- namely, strong brand recognition, an easy-to-use website or app, and a loyal customer following. Here are some of the top travel and tourism companies:

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1. Booking Holdings

Booking Holdings (BKNG -1.31%) is one of the largest online travel portals. It's the parent company of several popular travel booking sites, including:

• Booking.com
• Priceline.com
• Kayak.com
• Rentalcars.com
• Agoda

While the company has suffered during the pandemic, Booking slashed its global workforce to save more than $300 million annually. It came out of the ordeal with billions in cash on its balance sheet available to steady the company during down times. Both revenue and profitability rebounded rapidly in 2021, a trend that continued to kick off 2022. As measured by free cash flow, the company had almost fully recovered its pre-pandemic profitability by the first quarter of 2022.

Few companies have the ability Booking does to provide vacationers with a diverse set of travel planning and comparison tools. The travel company's global online reach should serve it well in the years to come.

2. Marriott International

Marriott International (MAR -1.06%) is one of the world's largest hotel companies, with more than 8,000 properties spread across almost 140 countries. It's a holding company for 30 brands, including:

• Marriott
• Sheraton
• Westin
• The Ritz-Carlton
• Courtyard Hotels
• Residence Inn

The company has an asset-light business model, which is unique compared to other real estate investment options. It earns fees for licensing its brands and managing properties to franchisees, so Marriot doesn't incur the expenses of actual property ownership. Marriott's extensive geographic reach, world-class brands, and global loyalty programs make it a steady, long-term, winning stock.

Like many other companies in the travel space, Marriott's revenue and profitability rebounded after the pandemic. New digital travel apps and guest reward initiatives hold ample promise to push the company's financials to fresh all-time highs in the years to come.

3. Airbnb

Airbnb (ABNB -2.37%) has completely shaken up the world of travel and vacations. The online marketplace allows homeowners and property managers to list homes, condos, and other unique places to stay. It's amassed a vast number of listings (almost 8 million as of early 2024) across the globe. Many of them are in less-traveled neighborhoods and unique locations that hotel chains can't match.

Remote work has become more commonplace in recent years, and Airbnb has emerged as a top beneficiary of this change in the global workforce, too. Millions of people around the world are now working while they travel, and extended-stay bookings have been a top area of growth for Airbnb since 2021.

The company recently upgraded its platform by adding flexible-date search tools and making the process of becoming a host faster and easier. There are also numerous countries where Airbnb has minimal listings, too. Before the pandemic, Airbnb enjoyed years of explosive growth, and it's extending its hot streak into 2024. This isn't just a travel and tourism rebound play; Airbnb is a top growth stock worth considering, especially now that it touts lucrative profit margins to pair with its rate of expansion.

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4. The Walt Disney Company

The Walt Disney Company's (DIS -0.93%) theme parks and hotels are some of the world's premier vacation destinations. Disney cruise ships are also popular and offer family-themed voyages, making the House of Mouse an ancillary bet on the cruise industry, too. These in-person experiences made a comeback in 2021 for Disney and are profitable once again.

Although many travel companies are totally reliant on travel demand to generate income, Disney has other irons in the fire. In addition to travel, the company makes money from television, movies, streaming content (Disney+, Hulu, and ESPN+), and merchandise sales. These numerous revenue streams are part of the reason why many investors consider Disney an undervalued stock for 2024.

Disney has become a controversial business though, embroiled in political and social debates that have been a distraction from its best-in-class properties and fan-favorite entertainment franchises. Bob Iger made a return to the CEO position in late 2022 after a brief retirement, and still has ample work to restore the company to greatness. However, value-seeking investors should look for Disney’s bottom line to make a more meaningful recovery as revenue reaches new records in 2024.

5. Uber Technologies

Top ride-hailing business Uber Technologies (UBER -2.5%) has turned over a new leaf. After years of bleeding cash as a high-growth technology darling, the company has grown up and is now highly profitable. Uber stock jumped to new all-time highs in early 2024 as a result.

But why consider this as a top travel stock? Uber facilitates tens of millions of short trips every single day. Many of these are for travelers and vacationers, as well as for groups headed to and from entertainment destinations.

Uber isn't the high-growth business it was in the past, but that's OK. It's still growing at a more gradual pace and could be at the beginning stages of cranking out high levels of profit for shareholders. As the world starts traveling again, Uber is ready to provide rides, and could be a top beneficiary from the travel trend.

Travel ETFs

Travel and leisure ETFs

If you're bullish on travel and tourism but would rather not invest in individual companies, then buying shares in an exchange-traded fund (ETF) may be a better option. Travel-focused ETFs invest in large numbers of travel and tourism companies and provide instant portfolio diversification within the sector.

Three travel ETFs to consider:

• The ETFMG Travel Tech ETF (NYSEMKT:AWAY) is a travel technology-focused ETF. About half of its holdings by value are bookings and reservations companies, with the remainder split among ride-sharing, price comparison, and travel advice businesses. The fund has 33 stocks and an annual expense ratio of 0.75% (or $7.50 a year for every $1,000 invested.
• The U.S. Global Jets ETF (JETS -0.82%) is a niche travel ETF focused on airlines. U.S. airline stocks make up more than half of the fund's holdings, which also include the stocks of several international carriers. The fund has an annual expense ratio of 0.60%.
• For a more diversified travel and leisure portfolio, consider an ETF such as the Invesco Dynamic Leisure and Entertainment ETF (PEJ -1.17%). The portfolio contains 31 U.S. stocks spread across travel, accommodations, and entertainment businesses. The fund has an annual expense ratio of 0.55%.

Related investing topics

Alternative options

Alternative travel investments

Your travel-related investments are no longer confined to this planet. Several companies are exploring space, including publicly traded Virgin Galactic Holdings (SPCE -5.56%). Richard Branson's company is now offering flights into space -- for $450,000 per astro-tourist!

Another option is the Procure Space ETF (NYSEMKT:UFO). The ETF invests in a variety of companies that are catering to Virgin Galactic and its competitors as they work to take flight to the next level.

Don't forget ecotourism stocks

Ecotourism is a fast-growing niche, especially among younger travelers. The objective of ecotourism is to learn about and support conservation efforts in exotic and often threatened natural environments and to visit those places without causing any further ecological damage.

Specialized tours, lodging in remote locales, and minimizing carbon emissions while traveling are all forms of ecotourism. Although most ecotourism companies are not publicly traded, travel booking companies such as Airbnb and Booking.com provide services that allow vacationers to find and schedule ecotourism experiences.

JetBlue Airways (JBLU 0.59%) stands out for its commitment to achieving net-zero carbon emissions by 2040. The discount airline has also established partnerships with multiple environmental organizations, including The Nature Conservancy and The Ocean Foundation.

Travel companies are often niche, enabling you to invest in a variety of travel and tourism stocks that cater to your particular interests and investment priorities. Investors interested in ecotourism should look for eco credentials when evaluating travel and tourism stocks.

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