Final boarding call: Travel stocks forecast for 2023

  (photo credit: INGIMAGE)
(photo credit: INGIMAGE)

You could think that you had a really tough couple of last years, and with good reason. Those dreadful masks, stay-at-home 'lockdowns', school and workplace closures, cancellation of events and public gatherings, restrictions on public transport and traveling, supply disruption and so on. Now, picture that you injected all your funds to open a new comfortable hotel just before the start of the pandemic. Ugh, what can be more horrific? Well, somehow the travel industry managed to pull through in this nightmare lasting the past several years – then maybe 2023 is meant to be a year for growth. Let’s find out.

First, we need to go over all the key events that have put the screws on the tourism industry since the start of 2020. Okay, of course, our number one here is the Covid-19 pandemic. Air carriers, hotels and resorts, cruise companies, theme parks, casinos – all of them felt the effect of the Covid-19 more than other businesses. Maybe, ‘effect’ is not even the right word because they didn’t even have an opportunity to function.

Together with the lifting of Covid restrictions or any piece of news saying that the pandemic is about to end, travel stocks were rising. You can see it on the chart which contains the stocks belonging to different sectors of travel industry including air carries Alaska Air Group (ALK), Delta Air Lines (DAL), Southwest Airlines (LUV); amusement parks owner Cedar Fair (FUN); casino-entertainment companies Caesars Entertainment (CZR) and Melco Resorts and Entertainment (MLCO); and Vail Resorts (MTN) owning mountain hotels.

Stock chart (Credit: TradingView)Stock chart (Credit: TradingView)

The next massive downfall after the pandemic happened in February 2022 when the military conflict between Russia and Ukraine started. And we can see much less impressive and more local price movements. To monitor every possible change, you can use different tools for traders. For example, the economic calendar gives an opportunity to watch the most significant events that might affect the stock markets. Another tool shows most active stocks – high activity is a great indicator that can help you find assets for potentially successful trades.

Anyway, what about 2023? Is it a good or bad year for the tourism industry and travel stocks? On the one hand, the Covid has left news headlines. On the other hand, the world is under the influence of the economic and geopolitical crisis. Let’s underline several significant moments.

The Covid restrictions are almost forgotten. Even China canceled its zero-Covid policy – it means the comeback of the enormously big market for the travel industry. 

Airlines grow their profit and add more and more new routes. 2023 will probably become the first profitable year for the air travel since 2019.

Business tourism gets back to our life again. It was replaced by Zoom calls during the pandemic but now air carriers and hotels host this kind of traveler.

In addition, this winter in Europe turned out to be much warmer than expected, so the scales of crisis and inflation seemed to have turned slightly in our favor.

And last but not the least, people are tired of sitting at home. So, they are ready and willing to tolerate rising prices. 

We’ve mentioned multiple positive factors above, however it doesn’t mean that travel stocks will soar over the course of 2023. There are well-known stress factors – the crisis, the unstable economic and geopolitical situation, inflation and limited travel opportunities in a few regions of the planet.

Below you can find travel stocks that will have probably shown good results by the beginning of 2024 by analysts' consensus forecasts.

Caesars Entertainment, a company that manages casinos and resorts. The average forecast is +44% in the next 12 months.

Alaska Air Group, an American air carrier. The average forecast is +38% in the next 12 months.

Delta Air Lines, an air carrier and one of the SkyTeam airline alliance founders. The average forecast is +35% in the next 12 months.

Southwest Airlines, an American low-cost carrier. The average forecast is +34% in the next 12 months.

Melco Resorts & Entertainment, engages in casino gaming and entertainment resort facilities. The average forecast is +22% in the next 12 months.

Vail Resorts, engages in the operation of mountain resorts. The average forecast is +17% in the next 12 months.

Cedar Fair, engages in maintaining amusement parks, water parks and hotels. The average forecast is +16% in the next 12 months.

One may wonder if it’s a good time to invest right now. Well, no one can know for sure what the future holds, especially the short term future. Mentally, it can be a really hard time to invest because there’s no way to know if the market will fall further. Just because a stock has suffered a precipitous decline does not mean it won't carry on its losing streak. 

Of course, all the figures above showing the amount of potential growth appeared here due to professional analysts. However, there’s no guarantee that these forecasts will manifest in reality. That’s why, before you click that ‘Buy’ button, remember to always do your own research and make decisions based on it. 

This article was written in cooperation with TradingView