After a period of disarray stemming from international tensions, investors are showing renewed interest in tourism and travel stocks. This shift is partially driven by surprisingly robust tourism figures in Australia. According to the Australian Bureau of Statistics, short trips taken in May increased by 20.1 per cent compared to the previous year.
However, opinions on travel stocks remain divided. Corporate Travel Management and Flight Centre, along with tourism asset operator Kelsian, are among the most shorted on the ASX. Flight Centre’s CFO, Adam Campbell, acknowledged the sector’s turbulent past year but remains optimistic about the future, anticipating a rebound contingent on easing political tensions and improved consumer confidence. Flight Centre provides global travel experiences to leisure and corporate travellers. Corporate Travel Management delivers innovative and cost-effective travel solutions.
Despite some skepticism, certain analysts are optimistic about specific companies. Wilson Asset Management has increased its exposure to Web Travel Group, a hotel aggregator, and Corporate Travel. Macquarie analysts highlighted Web Travel as their preferred choice in the sector. Morningstar has named hotel booking software company SiteMinder as a top pick, citing its oversold status and resilient margins.
Conversely, Atlas Funds Management advises caution, particularly regarding Qantas and Virgin Australia, due to their volatility and vulnerability to global downturns. IG market analyst Tony Sycamore favors Qantas and Corporate Travel, while expressing concerns about Flight Centre and Helloworld due to margin pressures and competition.
