Travel stocks and exchange-traded funds (ETFs) are in the limelight as a large number of Americans gear up to travel in order to visit family and friends for Thanksgiving. Days leading up to the fourth Thursday of November (Nov. 25, 2021), and the days right after, are typically the most important travel season in the US.
The American Automobile Association (AAA) “predicts 53.4 million people (will) travel for the Thanksgiving holiday, up 13% from 2020. This brings travel volumes within 5% of pre-pandemic levels in 2019, with air travel almost completely recovering from its dramatic fall during the pandemic.”
Metrics on the state of the economy, as well as COVID-19 infection numbers, typically affect consumer sentiment. Despite ebbs and flows, most analysts concur that spending levels by Americans should stay healthy in the coming weeks.
Meanwhile, travel stocks have been recovering steadily from extreme lows hit over a year ago. Understandably, for most of these companies, full year 2021 revenue expectations have improved significantly since the early days of the pandemic in 2020.
Among the various indices Wall Street follows, this is how three fared in 2021:
- Dow Jones Transportation Index up 34.0% year-to-date;
- Dow Jones Airlines Index: up 8.9% YTD;
- Dow Jones Hotels Index: up 25.2% YTD.
We previously covered three travel-related ETFs:
- ETFMG Travel Tech ETF (NYSE:AWAY): up 8.5% YTD (here);
- Invesco Dynamic Leisure and Entertainment ETF (NYSE:PEJ): up 27.4% YTD (here);
- US Global Jets ETF (NYSE:JETS): up 4.6% (here).
Today we introduce two more ETFs that started trading in 2021. In other words, they are small funds with little trading history. However, they could still appeal to a range of readers.
1. AdvisorShares Hotel ETF
- Current Price: $26.84
- 52-Week Range: $21.61 - $27.80
- Expense Ratio: 0.99% per year
The AdvisorShares Hotel ETF (NYSE:BEDZ) invests mainly in the hotel industry and related services, like resorts or casino operators. The fund started trading in April 2021.
BEDZ currently has 29 stocks. The top 10 names make up about 56% of net assets of $10.1 million. In terms of sectors, we see consumer discretionary (84.7%), followed by real estate (10.03%) and telecom services (2.7%). Around 95% of the businesses are US-based.
Leading holdings include Bluegreen Vacations Holding (NYSE:BVH), which offers vacation ownership interests; Golden Entertainment (NASDAQ:GDEN), Full House Resorts (NASDAQ:FLL) and Century Casinos (NASDAQ:CNTY), which operate casinos and related leisure facilities; and Choice Hotels International (NYSE:CHH), whose hotel chains include Comfort Inn, Clarion and Econo Lodge.
Since inception in late April, BEDZ has returned about 8% and recently hit a record high. Readers interested in lodging and related leisure stocks might consider doing further due diligence.
2. SonicShares Airlines Hotels Cruise Lines ETF
- Current Price: $4.93
- 52-Week Range: $4.43 - $6.35
- Expense Ratio: 0.75% per year
The SonicShares™ Airlines, Hotels, Cruise Lines ETF (NYSE:TRYP) is a small fund that provides exposure to businesses in the airline, hotel and cruise line industries. It was first listed in May 2021.
TRYP, which has 59 holdings, tracks the Solactive Airlines, Hotels, Cruise Lines Index. Close to two-thirds of the companies are based in the US, followed by the UK (11.21%), Hong Kong (8.75%), France (2.42%) and others.
Airlines have the largest slice, with 43.7%. Next in line are hotels (28.5%) and cruise lines (12.2%). The leading 10 names comprise about 45% of net assets of $8.2 million.
Hospitality heavyweights Hilton Worldwide Holdings (NYSE:HLT) and Marriott International (NASDAQ:MAR); European airline Ryanair (NASDAQ:RYAAY); cruise operator Royal Caribbean Cruises (NYSE:RCL); and Delta Air Lines (NYSE:DAL) and United Airlines (NASDAQ:UAL) are among the top names on the roster.
Since early May, TRYP is down about 7%. Readers looking for a diversified fund should research the fund further.