This Travel Stock Is Becoming A Household Name - InvestingChannel

This Travel Stock Is Becoming A Household Name

Proprietary Data Insights

Financial Pros Top Lodging Stock Searches This Month

#4Hyatt Hotels3,723
#5Wyndham Hotels & Resorts2,532

Get Outta Town Friday  

Source: Arrivalist 

Nearly 38 million Americans will travel more than 50 miles from home this Memorial Day weekend. That’s up 8.5% from last year. 

Quite a few of us are spitting in the face of the almost all bad travel data. 

The same obstacles you face as a consumer can present opportunities for you as an investor. 

So we’ll start The Juice sad and end it happy today. 

The Nightmare Data On Travel

Source: Hopper 

  • The average domestic airfare heading into summer – $383. Up 34% from this time in 2019. 
  • Average nightly hotel rate – $154, a 36% increase from 2021. 
  • Average nightly rate for an Airbnb (ABNB) in Q1/2022 – $168. That’s 37% higher than the pre-pandemic rate, but only 5% more expensive than Q1/2021. 

The Airbnb stats offer a glimpse into the potentially good investment news we’re about to discuss. 

But First, More Bad News 

  • Typical cost of a rental car – $60 per day. Up roughly 20% from January, 2021. 
  • As of late Thursday, gas costs an average of $4.60 a gallon nationally. 
  • In California, it’s more than six bucks. 
  • A year ago, the national average was just $3.04. 

It’s next to impossible to keep up with gas prices. So they might be higher by the time you hit the road.


The Best Company And Stock For A Crazy Travel Season

Key Takeaways:

  • Airbnb is not a travel company. It’s a technology platform.  
  • The company’s at an interesting life stage from a long-term investment perspective. 
  • Now might be the time to call Airbnb a cultural phenomenon and act accordingly. 

As a stock, how do you categorize Airbnb? 

It makes increasingly less sense to classify it as a travel stock, no matter the subsector.

We explained the lame and outdated rationale around grouping Airbnb with hotels and offered some analysis in the May 5th edition of The Juice

The Juice’s Trackstar Data Helps Paint The Picture 

There’s a reason why Airbnb blows traditional lodging stocks away in our proprietary Trackstar database of the stocks financial pros are searching for. 

It’s because Airbnb isn’t a place to stay; it’s a leader in the advanced sharing economy. It’s as much, if not entirely a tech company than a lodging company. You use Airbnb’s platform to connect with people offering a wide array of brick and mortar lodging experiences. 

So it makes sense that the number of searches Airbnb generates (83,709) aligns with the level of interest in companies such as …  

  • Uber (UBER) – 79,211
  • Snap (SNAP) – 108,359
  • Roku (ROKU) – 110,871

… and not Marriott (MAR), Hilton (HLT), Hyatt (H), and Wyndham (WH)

Interestingly, the pandemic appears to have helped Airbnb, as concerned travelers likely considered it a safer alternative to relatively crowded hotels. 

The Next Really Big Thing? 

Be skeptical of people who tell you they invested early in today’s household names. Because it’s not always easy to spot them before they become culturally entrenched. And it can be even more difficult to act – with your hard earned money – if you think you’ve spotted the next big thing. 

Remember when it first happened? 

  • You couldn’t walk by a mailbox without seeing an Amazon (AMZN) box. 
  • Those old school Netflix (NFLX) red envelopes became ubiquitous in mail carrier’s bags and in your and your neighbor’s mailboxes. 
  • Google (GOOG) (GOOGL) became a verb. 

We’ll spare you the charts of how much money you’d have today if you invested in those companies back then. 

Instead, live in the present, look forward, and consider this rather ugly chart. 

Source: Google Finance 

Since the aforementioned May 5th Juice analysis of ABNB, the stock’s down about 20%. And that’s after another in a strong series of earnings reports. 

Does this mean stay away? Or does it scream opportunity? 

It all depends on your perspective. 

Will Airbnb become as much a part of our culture as Amazon, Netflix (despite its recent stumbles), and Google have? Or is it already? I mean we often refer to getting an Airbnb. The equivalent of just Google it or let’s Netflix and chill

The Bottom Line: If you’re looking to hit a home run by devoting a disproportionate amount of cash to one stock – in this case ABNB – you have to think longer and harder. If Airbnb doesn’t pan out, you run the risk of crushing your financial future, be it retirement or other plans. 

However, as part of a comprehensive long-term investment strategy, Airbnb might make sense as the next Amazon, Netflix, or Google in your portfolio. 

Comprehensive meaning you own more risky opportunities (like ABNB), alongside dividend-paying blue chip stocks such as Procter & Gamble (PG), established tech players, broad market barometers like the S&P 500 (SPY), and alternatives such as cryptocurrency.

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