The COVID-19 pandemic dealt a severe blow to both cruise and air travel industries. The mere thought of traveling in a closed compartment with people from all over the world scared travelers. Hospitality businesses like hotels and restaurants were less affected but still felt the heat.
Over the last year, the air travel industry has recovered to the pre-pandemic levels. Cruise passengers have grown in numbers for the second successive year in 2024, and are likely to post a record in 2025 as well.
On the back of this recovery, travel services stocks have performed well and are likely to continue performing well in the future. We looked at the top 7 travel services stocks by screening them based on sales growth since the pandemic.
To come up with the list of 7 high-growth travel services stocks, we only considered stocks with a market cap of at least $10 billion and a 5-year sales growth rate of over 20%.
7. Booking Holdings Inc. (NASDAQ:BKNG)
Booking Holdings Inc. offers reservation and related services for traditional and digital restaurants and travel. It operates the booking.com website that provides online accommodation reservations and Priceline, a hotel, flights, and rental cars booking service.
The company recently entered into a strategic partnership with Antom, a trade payment and digital transformation services provider to improve the payment process for Asian customers. The main purpose of this partnership is to leverage Antom’s multi-currency solutions and worldwide payment processing expertise to enhance its cross-border transactions. On top of that, the company announced strong Q3 2024 financial results indicating an 8.9% revenue growth as compared to the previous year and 36.44% revenue growth as compared to the previous quarter. As per the report, the net income of the company also rose by 65.48% QoQ while 0.24% YoY.
BKNG stock has performed well in the recent past, posting a gain of 29% over the past year. This strong performance and the company’s potential for growth in upcoming years make it a worthy option for investors.
6. MakeMyTrip Limited (NASDAQ:MMYT)
MakeMyTrip Limited is a digital travel company that supplies travel products and services. It operates in hotels & packages, air ticketing, and bus ticketing segments. The company provides a range of products and services including rail tickets, bus tickets, car hire, and other products and services.
As India’s domestic tourism is increasing and the government is supporting the travel industry by investing in travel infrastructure, the company’s profitability is poised to grow. In addition to domestic tourism, government investments will encourage the global audience and give rise to international tourism. Comparing the travel industry growth in different countries, India is leading the list with 6.7% YoY growth in 2024 and a projected 6.5% YoY growth in 2025.
The firm recently delivered positive earnings for the first time in 10 years. On the back of this profitability and the industry growth, the company is set to be a big gainer in 2025.
5. Viking Holdings Ltd (NYSE:VIK)
Viking Holdings Ltd operates in passenger transportation and offers passenger shipping and other forms of travel services. The company operates through two segments; Ocean and River. It has carved out a niche for itself by operating smaller cruises that can access ports that are otherwise unavailable to larger ships due to their location.
Things have gone well for the company with this approach. However, Royal Caribbean Cruises (RCL) recent announcement of launching Celebrity Cruises aims to excel in the same niche, so Viking Holdings has its task cut out.
In December, Citi analysts considered the company undervalued and assigned a price target of $54. Analysts believe the company deserves the same multiple as its competitor RCL, but a lot of that will depend on how the company deals with the new competition. So far, the stock has recovered well from the dip caused by RCL’s impressive earnings. The market is willing to give the stock the respect it deserves. As soon as VIK can prove with numbers that it can compete, the valuation will take care of itself.
4. Carnival Corporation & plc (NYSE:CCL)
Carnival Corporation & plc operates as a cruise company and offers leisure travel services. It operates in Europe Cruise Operations, NAA Cruise Operations, Tour & Other, and Cruise Support segments. The company owns and manages glass-domed railcars, hotels, motor coaches, and lodges.
CCL was one of the worst-hit stocks during the pandemic when its price fell below the $8.5 level. Since then, the company has cleaned up its balance sheet and on the back of a staggering recovery of the travel industry, has doubled in price in just over a year. This optimism is likely to continue driving the stock up in the future.
According to a research report from JP Morgan, the cruise industry is set to grow by high single digits over the next 5 years. This is because the spending capacity of the average millennial has gone up considerably in the last 5 years. With other cruise lines reporting increased consumer spending aboard its cruises, there is enough evidence for this to place a bet on the stock despite it being near its 52-week highs.
3. Norwegian Cruise Line Holdings Ltd (NYSE:NCLH)
Norwegian Cruise Line Holdings Ltd is a cruise company running globally. The company operates in Regent Seven Seas Cruises Brands, Norwegian Cruise Line, and Oceania Cruises. The company is riding a positive wave of industry-wide growth in bookings, which is evident from its one-year returns of over 63%. According to data from AAA Travel, the number of Americans going out on cruises will hit a new record in 2025, for the third year in a row.
At a broader level, the industry is expected to grow at 4.77% in 2025. NCLH has already been able to maintain its market share, as evident by the cumulative bookings hitting the upper end of the company’s expectations. If the company can grow with the industry, there is no reason why it cannot continue to do so in 2025.
Another driver of the company’s growth is its fleet expansion. The company expects to add two new vessels, the Prima and the Allura Class by 2028. These new cruises are fuel-efficient and have a larger capacity, helping the company improve its operations in the long run.
2. Royal Caribbean Cruises Ltd (NYSE:RCL)
Royal Caribbean Cruises Ltd is a cruise company that operates under different brands including Celebrity Cruises, Royal Caribbean International, and Silversea Cruises. The company’s stock was JP Morgan’s favorite pick for 2025 as the investment bank chose RCL in its list of 12 stocks from the consumer space. RCL was given a price target of $253, which the stock hit in the first month of the year after a stellar earnings report.
RCL was able to beat analyst estimates for its Q4 EPS backed by strong bookings demand and the ability to raise prices without losing customers. The earnings report sets the tone for a great year ahead. CEO Jason Liberty is optimistic of a staggering growth in profitability in the year ahead:
2025 is shaping up to be another great year, with expected adjusted earnings growth of 23%, as our commercial and vacation experiences flywheel continues to accelerate the growing preference for our leading brands, the most innovative ships, and world-class private destinations
In addition to the increasing demand, customers are now willing to spend more when on an RCL cruise, helping the company further monetize its existing customers. The firm’s premium offering ‘Celebrity River Cruises’ is also set to start taking bookings this year with an expected launch in 2027.
1. Airbnb Inc. (NASDAQ:ABNB)
Airbnb Inc. is a hospitality service that allows hosts to provide accommodation and related activities to guests. Its online platform connects homeowners with travelers through mobile devices and websites to ease the accommodation booking process. Though the stock suffered losses in January, analysts are still optimistic about the stock’s performance.
The reason behind the optimism is the solid 9-month performance of the company which indicates a 12% increase in revenue as compared to the 9-month revenue of the previous year. The company’s profitability decreased but that is expected in seasonal stocks. In addition to the outstanding revenue growth, another major achievement was the growth in operating cash flow which went up from $3.82 billion to $4.05 billion.
As a result of the strong Q3 financial result, ABNB is expected to grow its revenue by 15% YoY. Not just the revenue but the free cash flows are projected to raise approximately $4.2 billion in 2025. The company is well-positioned to grow in 2025 based on the strong performance of the previous year and attractive 2025 guidance. Investors should take the decline in share prices as a buying opportunity for potential gains in the future.
Airbnb Inc. is not on our latest list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 57 hedge fund portfolios held ABNB at the end of the third quarter which was 51 in the previous quarter. While we acknowledge the potential of ABNB as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as ABNB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article was originally published at Insider Monkey.
