The summer travel peak season is here. These leading tourism stocks are worth paying attention to.

As summer approaches, leading tourism stocks are entering their peak performance period. From the “revenge travel” after the pandemic to the current “normalization of consumption,” the tourism-related industry is undergoing a profound transformation. Although many companies face debt pressures and equity dilution, rising ticket prices and the recovery of foot traffic are creating investment opportunities.

Investment Logic of Tourism Concept Stocks

The tourism industry covers a broad range, from food, accommodation, transportation, entertainment to itinerary planning, almost all aspects can be included in investment considerations. However, for many companies, tourism is just a side business—hotels doing takeout, airlines turning into cargo carriers—making it essential for investors to focus on the “tourism revenue proportion” to accurately identify bottoming opportunities.

The pain during the pandemic is now in the past; companies generally face long-term pressure from “high-interest debt.” In the 2022 global rate hike environment, many firms carried heavy debt burdens. Although revenues have recovered to pre-pandemic levels or higher, net profits remain limited. The good news is that with easing rate hike expectations, opportunities for debt restructuring will significantly improve companies’ profitability.

Growth Opportunities for Leading US Tourism Stocks

The US, as the world’s most capital-dense market, hosts world-class travel service providers. These companies serve not only the domestic US market but are also the preferred platforms for global travelers.

Online booking leader Booking Holdings (BKNG) offers integrated one-stop services including flights, accommodations, car rentals, and attraction tickets, with well-known brands like Booking.com, Agoda, Priceline. The company’s revenue mainly comes from agency fees (hotel commissions) and distribution income (markup on room rates), accounting for over 90% of revenue. With AI technology integrating the “connected travel” concept, the company is expected to further improve conversion rates and user stickiness.

Shared accommodation platform Airbnb (ABNB) adopts a completely different strategy—empowering hosts rather than competing with hotels. According to financial reports, the average annual profit per host worldwide reaches $9,600, with an average room price of about $67, far below traditional hotels. The platform emphasizes “experiencing local culture” and “cost-effectiveness,” using user reviews, insurance, and big data to optimize safety and hygiene issues. Compared to Booking’s “transaction” model, Airbnb’s “matchmaking” approach offers greater growth potential.

Entertainment giant Disney (DIS) is not just about theme parks but combines content and experiences. Although recent struggles due to streaming losses and declining ad revenue have caused setbacks, its extensive IP library and theme park monetization capabilities remain strong. Each successful IP can drive a complete business chain including movies, sequels, merchandise, and theme parks. Post-pandemic foot traffic recovery provides vital support for the company.

Cruise stocks: Royal Caribbean (RCL) and Carnival (CCL) have distinct strategies. RCL targets high-end customers, with higher onboard spending per passenger and strong gross margins; CCL adopts a mass-market approach, mainly earning from ticket sales. Considering the aging trend and the continued rise of cruise tourism, along with hotel and airfare price increases prompting consumers to choose cruises, RCL’s margin structure and growth momentum make it more noteworthy.

Global hotel leader Marriott International (MAR) has been the world’s largest hotel group since 1927, covering luxury to economy segments. With post-pandemic global travel expenditure expected to rise, the company has increased room rates accordingly. Its global average occupancy rate and revenue per available room (RevPAR) increased by 4.2% annually, with 46,000 new rooms added in 2023. It can be seen as an “enhanced version of Regent,” with growth potential and risk diversification far exceeding regional Asian companies.

Asian casino leader Sands Group (LVS) benefits from the recovery of demand in Macau and the rise of Singapore as an Asian financial hub. With capital and foot traffic flowing in, the group plans to strengthen investments in Macau and Singapore, offering promising prospects.

Key Timing for Investing in Leading Tourism Stocks in Taiwan

Among Taiwan’s tourism stocks, Chin Hua (2707.TW) is a leading hotel chain, offering everything from backpacker hostels to five-star hotels. Its occupancy rates remain high, room prices steadily increase, and new hotel openings drive growth in dining revenue. During the pandemic, it actively expanded into the restaurant business, and its revenue continues to grow. In comparison, Wang Pin (2727.TW), a leading restaurant chain, lacks clear seasonal characteristics, and the impact of tourism’s peak and off-peak seasons on it is limited.

Critical Timing for Investing in Leading Tourism Stocks

The peak of the summer season has arrived. Booking data from many companies shows full bookings—for example, Royal Caribbean has confirmed sold-out tickets for 2024, and price increase expectations for 2025 are already forming. Investors can estimate with a simple formula: this year’s revenue × ticket price increase rate ≈ next year’s net profit increase. For more precise calculations, consider the cost savings from repaying maturing high-interest debt.

If significant growth is expected next year, now is the window for deployment. As consumer travel expenditure continues to rise, the profitability of leading tourism stocks will improve year by year.