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 Airbnb, Inc. (NASDAQ:ABNB)) 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 vacation home luxury bedroom setup with stunning decor showing a desired getaway experience.
Airbnb, Inc. (NASDAQ:ABNB)
Number of Hedge Fund Holders: 54
Airbnb, Inc. (NASDAQ:ABNB) is an international online platform that connects people looking for places to stay with those who have space to rent out. Guests can browse host listings and book a place to stay directly through the Airbnb website or app. Unlike traditional hotels, the company offers a wide variety of accommodations, catering to different preferences and budgets. This includes everything from private rooms in someone’s home to entire houses.
The company has been actively upgrading its platform to streamline the process of listing and booking, thereby enhancing the overall user experience. Over the past three years, Airbnb, Inc. (NASDAQ:ABNB) has launched more than 535 new features to improve user experience. Recent upgrades include personalized app features and enhanced listing quality, with over 300,000 low-quality listings removed to ensure better guest experiences. Moreover, the company has rolled out more than 50 upgrades in 2024 alone. These efforts have turned out to be fruitful as during the fiscal third quarter of 2024, the company witnessed an increase in bookings through the Airbnb app, which now accounts for 58% of total nights booked, up from 53% last year.
The company generated $3.7 billion in revenue, marking a 10% increase compared to the same quarter last year. This growth was attributed to a steady rise in nights and experiences booked, which totaled 123 million for the quarter. Management noted that it is experiencing a rise in first-time bookers, particularly among young travelers. Looking ahead to Q4, Airbnb, Inc. (NASDAQ:ABNB) anticipates continued growth in bookings despite potential challenges from tougher year-over-year comparisons. The company plans to introduce more features aimed at enhancing user experience and expanding its market presence globally.
Polen Focus Growth Strategy stated the following regarding Airbnb, Inc. (NASDAQ:ABNB) in its Q3 2024 investor letter:
“Airbnb, Inc. (NASDAQ:ABNB) declined in the period on concerns around a weaker demand outlook for the quarter as well as increasing marketing spend planned for the second half of 2024, pressuring near-term margins. Given the company’s exposure to the health of the consumer and related willingness to spend on leisure travel, we believe it’s important to take a step back to see the larger picture. Global accommodations have been and will likely continue to be a mid-single-digit growth market. Still, as private rentals become increasingly mainstream and the dependability of those private listings improves, we would expect private rentals to continue to gain market share. We continue to see Airbnb as a likely double-digit revenue grower over the next five years, and with modest margin expansion, we could expect mid-to-high-teens earnings growth.”
Overall, ABNB ranks 3rd on our list of best travel stocks to buy right now. While we acknowledge the potential of ABNB 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 ABNB 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.