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 Booking Holdings Inc. (NASDAQ:BKNG) 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 fast-paced travel agent making a bookings for a family vacation package.
Booking Holdings Inc. (NASDAQ:BKNG)
Number of Hedge Fund Holders: 93
Booking Holdings Inc. (NASDAQ:BKNG) is a major player in the online travel and restaurant reservation industry. It operates several well-known brands that help consumers plan and book various travel-related services. Its flagship Bookings.com platform offers access to about 3.4 million properties across more than 220 countries, including places to stay such as hotels, apartments, hostels, and vacation homes. Through its other brands, the company also offers airline ticket booking, car rentals, restaurant reservations, and vacation packages.
Booking Holdings Inc. (NASDAQ:BKNG) has not only fully recovered from the pandemic effects but is posting impressive financial results. Its operating income for the fiscal third quarter of 2024 was $3.2 billion, which is well above the pre-pandemic value of $2.4 billion in Q3 2019 and also shows growth on a year-over-year basis. It posted better-than-expected results across all major indicators. The Room Nights Booked increased 8% year-over-year, whereas the Gross Travel Bookings grew 9% during the same time.
As a result of larger booking values, stronger growth in the Asian Market, and resilience in Europe, Booking Holdings Inc. (NASDAQ:BKNG) grew its total revenue by 9% year-over-year to $8 billion. The company is still in the early stages of AI integration and management noted that it aims to improve customer experiences and streamline operations, with initiatives such as AI travel assistant. This integration is expected to further improve the platform thereby attracting more users. Looking ahead, management expects room nights to grow between 4% and 6% in the fourth quarter of 2024, driven by healthy demand for travel.
Wedgewood Partners stated the following regarding Booking Holdings Inc. (NASDAQ:BKNG) in its Q2 2024 investor letter:
“Booking Holdings Inc. (NASDAQ:BKNG) contributed to performance as travel spending across the U.S. and Europe remains quite healthy, whereas the Company took share in alternative accommodations, and looks set to expand margins after a few years of reinvestment. The Company has also been aggressively reducing its share count at reasonably attractive valuation multiples. Booking should be able to compound earnings at an attractive, double-digit rate for the next few years given these various initiatives.”
Overall, BKNG ranks 1st on our list of best travel stocks to buy right now. While we acknowledge the potential of BKNG 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 BKNG 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.