HERE ARE THE TOP TRAVEL STOCKS TO BUY IN 2022

There was an absolute devastation in the travel industry caused by the Coronavirus pandemic. There was a complete standstill in the travel industry for more than one year - and nearly two years in some cases. It should be noted that despite the fact that airlines were still operating, the load factors of the aircraft were so low that pilots were furloughed, ground staff was laid off, and the number of flights was drastically reduced, all while losses continued to accumulate. It would not be accurate to say that the lodging industry and the online travel agencies were not equally affected. It is likely that cruise ships suffered the most from the incident, with the CDC issuing "no sail" orders that caused vessels to drop anchor in several places around the world - some of which ended up on the scrap heap. However, despite the hardship the travel industry has faced for the majority of the last two years, a recovery is in sight. There is now a high level of vaccination among Americans, shutdown orders seem to be a thing of the past, and pent-up travelers are on the move. The U.S Travel Association estimates that domestic leisure travel has already surpassed pre-pandemic levels, and domestic business travel is expected to reach 96% of pre-pandemic levels by 2023.

Best Travel Stocks To Buy At The Moment

While consumers and businesses are already spending money on travel, certain barriers remain to profitability for travel companies. There were some companies that were forced to take on large amounts of additional debt in order to survive the pandemic, and others will take a considerable amount of time in order to ramp up their operations to the point where they are able to maximize their earning potential again.

The benefits of diversifying within a sector are significant in such an environment. To illustrate this point, here are 10 companies within the travel industry that have been rated a "buy" by Wall Street analysts. Depending on your investment objectives and risk tolerance, you may want to consult with your financial advisor.

Travel, lodging, and amusement companies are available to assist you in reaching your destination and making sure you have a pleasant stay. The variety of companies makes it difficult to pinpoint a single key metric to monitor. There are travel companies that are asset-heavy transportation companies and there are those that are primarily technology firms.
There are certain characteristics that are common to the best travel and tourism stocks, however -- among them strong brand recognition, an easy-to-use website or app, and a loyal following of customers. The following are some of the leading travel and tourism companies:

United Airlines (UAL)

In 2022, particularly during the summer months, you have seen how passengers have returned to airlines in greater numbers than before the pandemic. Carriers such as United Airlines, which has a robust domestic and international service, will benefit greatly from this change.
Nevertheless, carriers such as United still face a number of risks. In spite of the fact that Europe has been hit the hardest, airlines in general are experiencing lost luggage, understaffing, and the threat of a coronavirus outbreak returning soon. Fuel prices and inflation are also posing challenges to the airlines. Airlines like United have the potential for significant recovery if these problems prove to be temporary and passengers continue to fill the planes. NASDAQ informs us that 19 of the 19 analysts following the company have a consensus buy rating on the stock and an average 12-month price target of $47.67, about 30% above the current price.

Norwegian Cruise Line Holdings (NCLH)

As a whole, the cruise lines are fortunate to be afloat following all that they have endured during the Coronavirus pandemic. The major cruise lines were required to stop operating for more than a full year, in contrast to hotels and airlines, which were at least able to operate with limited capacity. Even so, they still had numerous expenses during that period, such as docking and vessel maintenance. Consequently, Norwegian Cruise Line Holdings had to incur an additional debt of $6.6 billion just to survive.
The industry is, however, showing signs of improvement. Since sailings began again on July 18, the CDC will no longer report Coronavirus levels on cruise ships, allowing cruise lines to discontinue pre-cruise testing and removing some of the negative publicity that had been hounding the industry since sailings resumed. Similar to the airlines, it will take some time before the cruise lines are able to resolve staffing issues and ship logistics to get everything up and running properly, but they appear to be on the right path. The consensus rating on Norwegian Cruise Line Holdings is a buy, with an average 12-month price target of $19.73. This would represent a 63% increase from the current price.

Booking Holdings (BKNG)

In the wake of the pandemic, online travel agencies such as Booking Holdings suffered greatly, as there were few items that customers were able to book. Booking Holdings is a company you probably would like to own if you believe the global travel industry is about to rebound. The company does not merely own its namesake website, Booking.com, which is the world's largest online travel agency. In addition to Booking Holdings, the company owns Agoda, Priceline, OpenTable, Rentalcars.com, and Kayak, a travel search engine.
Consequently, Booking Holdings controls a significant portion of online booking, and its revenues should increase as more travelers resume their normal travel patterns. The company reported a 146% increase in revenue over the prior year in its March 2022 earnings report. This may be indicative of future revenue growth. 24 analysts have rated Booking Holdings a strong buy, and their average 12-month price target sits at $2,588 per share, 35% above current levels.

Airbnb (ABNB)

It was a period of great concern for the lodging industry during the pandemic, which resulted in widespread carnage. Airbnb, an industry disruptor, surged 223% to an all-time high of $219.94 just two months after going public at $68 per share in December 2020. Nonetheless, the company was not unaffected by the pandemic, and even after a recent rally, its shares were trading at $108.84 on July 28, 2022.
Nevertheless, Airbnb's strengths remain intact after its IPO. A large and growing market is served by the company, and unlike its traditional lodging competitors, it does not have the huge expense of building, owning, acquiring, and maintaining physical properties. There are no physical properties on Airbnb's balance sheet since it operates as a service portal. By keeping costs low, the company is able to remain flexible.
According to analysts, Airbnb will continue to grow in the future. With a consensus rating of buy, the 30 analysts following Airbnb have an average 12-month price target of $157.15. Based on Airbnb's current price of $108.84, analysts expect a 44% jump over the next 12 months. 

The Walt Disney Co. (DIS)

Investing in Disney could be the answer if you are seeking an all-in-one stock that covers both entertainment and travel. The stock was punished mercilessly during the pandemic, as all three of its major industries - cruise lines, theme parks, and filmed entertainment - were shuttered. It has been slow to recover, with its stock down 14.51% in 2021 and 32.25% thus far in 2022. Therefore, the former growth stock is now considered a value play, but one that is expected to show strong recovery in the near future.
In The company owns both Marvel Studios and Lucasfilm in addition to its well-known library of American classic films. Aside from its flagship streaming service, Disney+, the company owns ESPN+, ABC, Lifetime, History, A&E, FX, and Hulu. In the coming years, earnings should rise as Americans and indeed tourists around the world consume the company's filmed and streaming content, return to theme parks, and sail on its cruise line. 
“Buy” is the consensus rating from 27 analyst groups following Disney stock, with an average one-year price target of $136.13. At $105 per share as of the end of July 2022, investors can expect an increase of 30% by the end of the year.

Southwest Airlines

As compared with most airline stocks, Southwest Airlines has fared well during the pandemic. This airline was the first major airline to post a profit during the pandemic, and it is well positioned to benefit as air travel in the United States returns to levels seen in 2019.
Over 50 years have passed since the airline was founded. It remains a well-run air travel company, despite the fact that it does not have the same reputation as an outsider disrupting the industry. The operating profit margins of Southwest Airlines are among the highest in the industry.
The balance sheet of Southwest Airlines is also among the best in the airline industry (its peers have more debt than cash, while Southwest has net cash and short-term investments). The company is one of the few airlines that has never declared bankruptcy. Its streamlined nature enables it to reduce expenses when flight demand wanes and emerge healthy when flight demand resumes.

 Marriott International

With more than 8,000 properties in nearly 140 countries, Marriott International is one of the world's largest hotel companies. With a business model that is asset-light, the company offers a unique alternative to other real estate investment options. As a licensing company and property manager, it earns fees, but does not incur the expenses associated with real estate ownership. A steady, long-term, winning stock, Marriott has an extensive geographic footprint, world-class brands, and a global loyalty program. It is worth noting that Marriott's revenue and profitability have rebounded in recent years and had approached 2019 levels by the first quarter of 2022, as has been the case for many other companies in the travel space.

TUI (LON: TUI)

There are a number of large holiday brands in the UK, including the TUI Group. Through its ownership of travel agencies, airlines, hotels, cruise ships, and retail shops, the British-German company offers exposure to various aspects of the travel sector. There has not been a sustained surge in demand for holidays to affect the share price of TUI, despite the most recent set of accounts showing an increase in revenues, a decrease in losses, and an increase in flight capacity, cruise ship capacity, and hotel capacity.

In response to the pandemic, the firm conducted a series of hard-line restructurings in order to reduce its cost base. The share price chart shows a support level of 185p in the region. With more than 20 million customers, it is only a matter of time before the strong fundamentals are reflected in higher share prices. 

 Avis Budget Group

Budget Avis is a global car rental company that owns brands such as Avis Car Rental, Budget Truck Rental, and Zipcar. Several local brands are also owned by the company in various regions throughout the world. It did well to navigate the pandemic, selling over 100,000 vehicles and reducing its costs by approximately $1 billion. The bankruptcy of competitor Hertz illustrates the scale of the challenges the sector has encountered, but also implies that a company such as Avis is well placed to capture market share.

Despite the fact that Avis' holiday rental fleet will certainly benefit from the pandemic recovery, ZipCar is the brand under Avis's banner that is showing some promise. ZipCar is a significant player in the car-share market, which is forecast to grow by 22.3% between 2020 and 2027. The demand for ZipCar should continue to rise in London, where driving is becoming more and more expensive.

During the past two years, used car prices have skyrocketed due to global supply chain issues which have reduced the number of new vehicles leaving the production lines. This is a nice addition to the long-term Avis stock strategy. Consequently, the balance sheet could improve or the sale of used cars to dealers and consumers could increase.

TripAdvisor

In TripAdvisor, customers are able to compare prices on flights, hotels, and cruises. The demand for advertising on TripAdvisor is expected to increase significantly as airlines, hotels, and restaurants look to entice consumers back. It is important to keep in mind that TripAdvisor's revenue is largely derived from click-based advertising and subscription-based advertising, so any increase in the travel sector as a whole will be positive for the price of TRIP stock. Shares of the Massachusetts-based company shot up following the worst of the pandemic, but have since fallen back to a level that makes it attractive once again. The website caters to the largest travel audience in the world by monthly views, serves 48 markets in 28 languages, and has 730 million reviews.

Summary
There is no doubt that the travel industry is on the rise, and there will undoubtedly be some big winners. Nevertheless, selecting the appropriate travel stock can be a challenging task, particularly in light of the effects of the pandemic. A successful strategy may consist of selecting market leaders in a variety of travel subsectors. It is important to conduct your own research and select stocks that are the best fit for your overall portfolio.

By Rashmi Goel