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 Expedia Group, Inc. (NASDAQ:EXPE) 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).
People interacting with a travel website, searching for the perfect destination.
Expedia Group, Inc. (NASDAQ:EXPE)
Number of Hedge Fund Holders: 52
Expedia Group, Inc. (NASDAQ:EXPE) is a major online travel company that helps people plan and book their travel experiences. It operates through three main segments including B2B, B2C, and Trivago. It is renowned for three main travel brands including Vrbo, Hotels.com, and Expedia. It generates a majority of its earnings through online booking transaction fees.
On December 18, BofA upgraded its stance on EXPE from Neutral to Buy. It raised its price target from $187 to $221 on the back of improved travel trends in the United States and Wall Street estimates of 10% EBITDA growth in 2025. The stock of Expedia Group, Inc. (NASDAQ:EXPE) has already grown by 28.50% over the past year due to strong travel demand in its B2B and B2C segments. Management noted that it continued to witness an accelerated booking growth rate for the second consecutive quarter in the fiscal third quarter of 2024, whereas its advertising and B2B segment also delivered strong double-digit growth.
During the fiscal third quarter of 2024, Expedia Group, Inc. (NASDAQ:EXPE) grew its revenue by 3% year-over-year, driven by 7% growth in gross bookings and a 32% surge in advertising revenue. Management introduced several new features aimed at improving customer experience, such as destination comparison tools and flexible date searches. These enhancements contributed to a 25% increase in package bookings during the quarter.
Carillon Chartwell Mid Cap Value Fund stated the following regarding Expedia Group, Inc. (NASDAQ:EXPE) in its Q3 2024 investor letter:
“Expedia Group, Inc. (NASDAQ:EXPE) is an online travel services provider with several leading brands including Expedia, Hotels.com, and Vrbo. The company saw accelerating bookings growth at Expedia and a return to growth at vacation rental platform Vrbo.”
Overall, EXPE ranks 4th on our list of best travel stocks to buy right now. While we acknowledge the potential of EXPE 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 EXPE 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.