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 Trip.com Group Limited (NASDAQ:TCOM) 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 customer in a travel agents office, highlighting the convenience of the companies corporate travel solutions.
Trip.com Group Limited (NASDAQ:TCOM)
Number of Hedge Fund Holders: 50
Trip.com Group Limited (NASDAQ:TCOM) is a major online travel agency based in China that provides a one-stop travel platform for users. The platform allows users to book various travel services including Hotels, Flights, and other booking services such as train tickets, car rentals, and guided tours.
On January 3rd, research analysts at CitiGroup upgraded TCOM from a Hold to Buy rating and raised their price target from $73 to $78. The company is benefiting from a strong comeback in travel internationally. During its fiscal third quarter results for 2024, management highlighted its international business experienced robust growth across all segments. Its outbound hotel and air reservations rebounded by around 120% when compared to the pre-pandemic levels in 2019. Whereas, the air tickets and hotel reservations were up 60% year-over-year.
As a result, Trip.com Group Limited (NASDAQ:TCOM) grew its third-quarter revenue by 16% compared to the same quarter in 2023 and 24% from the previous quarter. James Liang, Executive Chairman of the Board noted that AI will revolutionize the travel services sector and further increase the demand for online travel booking. Management has been integrating AI into its platform to provide personalized recommendations. For instance, TripBest analyzes over 100 million user reviews to suggest hotels, destinations, and experiences, while TripGenie serves as a virtual assistant that creates personalized itineraries and answers user queries in real-time. Trip.com Group Limited (NASDAQ:TCOM) is one of the best travel stocks to buy right now.
Overall, TCOM ranks 6th on our list of best travel stocks to buy right now. While we acknowledge the potential of TCOM 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 TCOM 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.
