We recently published a list of 10 Best Travel Stocks To Buy Right Now. In this article, we are going to take a look at where Carnival Corporation & plc (NYSE:CCL) stands against other best travel stocks to buy right now.
The State of International Tourism in 2024
According to a report by UN Tourism published on September 19, international tourism revived back 96% of the pre-pandemic levels during the first seven months of 2024. Around 790 million tourists were traveling around the globe during the said time, which is 11% greater than that in 2023 but still 4% less than in 2019. As per the report, the key drivers of this growth have been a strong demand for travel in Europe and also the re-opening of markets in the Asia Pacific region.
The Secretary-General of UN Tourism, Zurab Pololikashvili noted that the growth in international tourism has been in line with the projections made by the department. He mentioned that the sector is on its way to achieving full recovery from the biggest crises in history and that too in an environment of economic and geopolitical challenges. Pololikashvili suggested that the recovery highlights the growing demand for international tourism planning and managing companies to cater to the revival in a way that benefits the communities through inclusive and sustainable policies. In addition, to an increase in tourism, the air connections have also improved along with an easing in visa restrictions.
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The report also highlighted that increased air connectivity and visa facilitation have supported the recovery. Data collected by the UN World Tourism Barometer showed that the Middle East remained the strongest region relative to others as it surpassed the 2019 levels by 26% during the first seven months of 2024. Moreover, Africa also remained strong and hosted 7% more tourists than in 2019. On the other hand, Europe and the Americas which host the most tourists combined recovered 99% and 97%, respectively. Despite the robust growth, certain challenges remain unaddressed including geopolitical challenges, extreme climate conditions, and high inflation in certain regions of the world. Regardless, the report anticipates continued recovery and expects strong revenue from international tourism to persist for a long period.
Our Methodology
To compile the list of the 10 best travel stocks to buy right now, we used the Finviz stock screener. Using the screener we aggregated a list of travel services stocks sorted by market capitalization. Next, we ranked these stocks based on the number of hedge fund holders as per Insider Monkey’s third-quarter 2024 database.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A luxurious cruise ship sailing the deep blue sea, sun glistening off its decks.
Carnival Corporation & plc (NYSE:CCL)
Number of Hedge Fund Holders: 54
Carnival Corporation & plc (NYSE:CCL) is a major leisure travel company that primarily operates in the cruise industry. It owns and operates several well-known cruise brands, including Carnival Cruise Line, Princess Cruises, Holland America Line, Seabourn, and more. The company caters to North America, Australia, and Europe.
The company took a hard hit during the pandemic as its revenue declined by more than 73% in 2020 and around 65% in 2021. However, it has recovered well from pandemic lows as the stock has rallied more than 44% over the past year. Moreover, Carnival Corporation & plc (NYSE:CCL) posted an all-time high revenue of $25 billion for the full year 2024, indicating a 15% increase year-over-year. The growth was driven by a robust demand and increased consumer spending on traveling. Management of the company has developed a strong profitability model, which led fiscal 2024 net income to surpass its September guidance by $130 million to reach $1.9 billion. CEO, Josh Weinstein, noted that the company outperformed its initial guidance for 2024 by $700 million, contributing nearly $2 billion more to its bottom line year-over-year.
Looking ahead, Carnival is optimistic about 2025, predicting continued growth with yield increases expected to surpass historical rates. Management is enhancing its destination strategy to attract more guests and increase global awareness of cruise travel. The company has already booked over half of its available cabins for 2025 at higher prices than in 2024, indicating sustained demand and pricing power in the market. It is one of the best travel stocks to buy right now.
Overall, CCL ranks 2nd on our list of best travel stocks to buy right now. While we acknowledge the potential of CCL to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CCL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.