Travel ETFs Beat S&P 500 in a Month: Here’s Why?

The global travel industry is on its way to fully recovering from the effects of the COVID-19 pandemic this month, according to U.N. Tourism, as quoted on CNBC. During the first nine months of 2024, international arrivals worldwide reached 98% of the pre-pandemic levels compared to the same period in 2019. The remaining 2% gap is expected to close by December, signaling a major landmark for the industry.

Many regions have already surpassed the pre-pandemic levels. In the Middle East, international arrivals rose 29% during the first nine months of 2024 compared to the same period in 2019. Africa and Europe have also fully recovered. The Americas are at 97% of the pre-pandemic levels, while Asia-Pacific lags at 85%, mired by the slow return of Chinese travelers.

According to PwC’s 2024 Holiday Outlook Survey, U.S. travel trends this holiday season are similar to those of last year, with a net 46% of consumers planning trips. This year, 43% are opting for destinations within the United States (compared to 42% in 2023), and 8% are planning international travel (versus 7% in 2023).

Meanwhile, according to Deloitte’s 2024 Holiday Travel Survey, American travelers are planning to take an average of 2.14 trips in 2024, up from 1.88 trips in 2023, marking the highest trip frequency since travelling came to life after the pandemic. On average, travelers expect to spend $3,294 on their longest trip, a 4% increase from 2023.

Hospitality companies are preparing for an anticipated surge in middle-class travelers across Asia-Pacific. Hilton HLT operates 1,000 hotels in the region, surpassing its 2025 goal. It has an additional 915 properties in the pipeline.

Marriott International MAR opened the first Four Points Flex by Sheraton in Japan in November and 12 more are expected to open in Japan before the year-end. Meanwhile, business travel is rebounding strongly.

More holidaying means more visits to restaurants. Nearly 20% of leisure travelers seek out new restaurants or culinary experiences, according to a new report from Hilton. If this is not enough, many consumers normally plan to visit restaurants during the end-of-year holidays, while others plan to order delivery or takeout for events at home.

Overall, the National Retail Federation (NRF) expects holiday season sales in the United States in 2024 to increase 2.5-3.5% from 2023. This is a slower pace than the 3.9% year-over-year increase in 2023, but is consistent with the average growth from 2010-2019.

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