Today we are launching our seventh equity theme basket with the new one focusing on travel stocks. This segment of the equity market is poorly tracked through suboptimal equity indices and ETFs. Saxo’s travel theme basket will be much broader, span many different industries around traveling, and be better diversified across geographies. The basket will help clients and our research team to monitor the market’s discounting of the reopening and the resuming of travel activities.
A broader perspective on travel
When you look at the current equity indices on travel and the available ETFs this part of the equity market has not enjoyed a lot of love. The main equity index is the STOXX 600 Travel & Leisure Index, but this index is narrow, and it also includes gaming stocks. Our travel basket consists of 40 stocks (see below) spanning the entire value chain from airliner manufacturers, booking platforms, hotel chains, travel software, airlines, cruise lines, airports, and resorts, and across many different exchanges around the world. The travel basket is designed to take advantage of an increase in traveling across both the leisure and business segments.
Boeing Co/The | Airliner manufacturer | 157,110 | -24.0 | -19.1 | -11.9 |
Airbnb Inc | Booking platform | 125,788 | -29.7 | -95.4 | -12.2 |
Booking Holdings Inc | Booking platform | 98,351 | -54.9 | 18.1 | 2.6 |
Airbus SE | Airliner manufacturer | 93,951 | -29.2 | 6.8 | 6.4 |
Marriott International Inc/MD | Hotel chain | 48,727 | -49.6 | 10.1 | -6.8 |
Hilton Worldwide Holdings Inc | Hotel chain | 35,006 | -54.4 | 17.8 | -6.5 |
Southwest Airlines Co | Airlines | 36,049 | -59.7 | -27.3 | -6.3 |
Amadeus IT Group SA | Travel software | 33,831 | -61.0 | 14.2 | -11.3 |
Delta Air Lines Inc | Airlines | 31,799 | -63.6 | -28.2 | -3.6 |
Carnival Corp | Cruise lines | 30,216 | -73.1 | -30.6 | -26.6 |
Aena SME SA | Airport Services | 26,185 | -50.5 | 42.3 | -1.6 |
Expedia Group Inc | Booking platform | 25,117 | -56.9 | -5.5 | -8.0 |
Trip.com Group Ltd | Booking platform | 25,727 | -48.6 | 18.3 | 1.6 |
Royal Caribbean Cruises Ltd | Cruise lines | 22,966 | -79.8 | -66.9 | -8.4 |
Ryanair Holdings PLC | Airlines | 22,153 | -68.3 | 22.1 | 5.2 |
Huazhu Group Ltd | Hotel chain | 18,224 | -8.7 | 27.6 | -3.7 |
Shanghai International Airport Co Ltd | Airport Services | 18,005 | -41.9 | 56.7 | 9.9 |
Air China Ltd | Airlines | 17,520 | -27.1 | 26.3 | 4.6 |
International Consolidated Airlines Group SA | Airlines | 14,889 | -69.4 | -17.0 | -4.3 |
China Southern Airlines Co Ltd | Airlines | 15,388 | -32.0 | 22.7 | -4.3 |
Sydney Airport | Airport Services | 13,239 | -51.0 | 63.2 | -0.2 |
InterContinental Hotels Group PLC | Hotel chain | 13,214 | -48.3 | 5.8 | -11.2 |
Aeroports de Paris | Airport Services | 13,228 | -54.5 | 7.9 | -6.5 |
Vail Resorts Inc | Ski resorts | 12,681 | -33.7 | 28.2 | 2.8 |
Host Hotels & Resorts Inc | Hotel REITs | 12,153 | -70.4 | -27.0 | -3.3 |
Norwegian Cruise Line Holdings Ltd | Cruise lines | 11,315 | -80.2 | -84.8 | -3.5 |
Accor SA | Hotel chain | 10,840 | -60.0 | 23.8 | -8.1 |
Whitbread PLC | Hotel chain | 9,772 | -39.7 | 37.5 | -0.4 |
TripAdvisor Inc | Booking platform | 8,061 | -61.3 | -21.4 | -35.2 |
TravelSky Technology Ltd | Travel software | 7,516 | -15.8 | 41.1 | 7.6 |
TUI AG | Travel agency | 6,668 | -76.2 | -6.5 | -52.5 |
Choice Hotels International Inc | Hotel chain | 5,994 | -30.6 | 37.8 | -2.5 |
Travel + Leisure Co | Hospitality services | 5,328 | -45.4 | 7.0 | 9.3 |
Park Hotels & Resorts Inc | Hotel REITs | 5,387 | -70.0 | -26.4 | -10.0 |
Grupo Aeroportuario del Sureste SAB de CV | Airport Services | 5,295 | -24.9 | 41.3 | -4.7 |
Sabre Corp | Travel software | 5,163 | -66.4 | -31.7 | -14.7 |
MakeMyTrip Ltd | Booking platform | 3,821 | -64.1 | -24.2 | -2.5 |
Flight Centre Travel Group Ltd | Travel agency | 2,854 | -83.7 | -42.1 | -3.0 |
On the Beach Group PLC | Booking platform | 1,089 | -76.0 | -101.5 | -19.2 |
Airtrip Corp | Travel agency | 412 | -28.1 | -4.1 | 66.3 |
Source: Bloomberg and Saxo Group
The basket represents $1.05trn in market value with most of market value concentrated in Boeing, Airbnb, Booking, Airbus and Marriott International. As the table show, travel companies have experienced a dramatic decline in revenue of 52% and with EBITDA margins going negative for many companies. Over the next 1-2 years revenue will bounce back significantly as the world begins travelling again. It is also interesting to observe that most of the travel stocks are currently priced above analyst price targets.
Best performing segment YTD
This year travel stocks have done very well being the best performing theme basket up 21.3% even surpassing our commodity basket that is enjoying the reflation trade. Travel stocks are of course riding the reopening trades which are bets on parts of the equity market that will do well over the coming year as vaccinations will allow economies to open again and increase traveling activity.