The travel industry is undergoing significant transformation, with emerging trends reshaping the way people experience travel. Sustainable travel is gaining traction, with travelers seeking eco-friendly options that reduce their carbon footprint. In addition, the rise of "bleisure" travel, which refers to blending business and leisure, is showcasing new avenues for companies to cater to professionals seeking both productivity and relaxation.

Technological advancements, including AI, contactless services, and virtual reality, are improving the travel experience, making it more seamless and personalized. Furthermore, wellness travel is becoming increasingly popular, with consumers prioritizing health and well-being while on the go.

As the travel industry adapts to these shifts, several stocks are well-positioned to benefit, out of which Expedia Group, Inc. (EXPE), SkyWest, Inc. (SKYW), and Travel + Leisure Co. (TNL) stand out.

The global travel and tourism market is projected to grow 4% annually from 2024 to 2029, reaching a market volume of $1.11 trillion. This growth trajectory presents a significant opportunity for these stocks, offering the potential for robust investor returns in the coming years.

Let's delve deeper into the featured stocks:

Expedia Group, Inc. (EXPE)

EXPE offers a variety of travel products through brands like Expedia, Hotels.com, and Vrbo, providing services to individual travelers with lodging, flights, and car rentals. Its B2B services support airlines, travel agents, and corporations with travel technology, while trivago connects users to hotel options through its metasearch platform.

During the fiscal third quarter that ended September 30, 2024, EXPE’s revenues increased 3.3% year-over-year to $4.06 billion. Its operating income grew 25.5% from the year-ago value to $762 million. In addition, the company’s adjusted net income attributable to Expedia Group, Inc. and adjusted EPS came in at $809 million and $6.13, up 4% and 13.3% over the prior-year quarter, respectively.

Analysts expect EXPE’s EPS and revenue for the fourth quarter ending December 31, 2024, to increase 20% and 6.42% year-over-year to $2.06 and $3.07 billion, respectively. It surpassed the Street EPS estimates in each of the trailing four quarters, which is promising.

Over the past year, the stock has gained 32.8% to close the last trading session at $185.01. It soared 21.9% year-to-date.

EXPE’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

EXPE has an A grade in Quality and a B in Value. It is ranked #4 out of 52 stocks in the A-rated Internet industry.

Beyond what we have stated above, we also have given EXPE grades for Growth, Momentum, Stability, and Sentiment. Get all the EXPE’s ratings here.

SkyWest, Inc. (SKYW)

SKYW operates in the U.S. through SkyWest Airlines, SWC, and SkyWest Leasing segments. It provides passenger and air freight services along with aircraft leasing, on-demand charters, and ground handling services. These services are available to regional passengers, air freight customers, third-party airlines leasing aircraft and engines, charter service clients, and airport authorities.

In the fiscal third quarter ended September 30, 2024, SKYW’s total operating revenues increased 19.1% year-over-year to $912.79 million. Its operating income was $131.44 million, up 166.7% from the year-ago value. Moreover, its net income and EPS stood at $ 89.71 million and $ 2.16, up 282.1% and 292.7% over the prior-year quarter, respectively.

Street expects SKYW’s revenue and EPS for the fourth quarter ending December 31, 2024, to increase 21% and 331.8% year-over-year to $909.96 million and $1.81, respectively. It surpassed the consensus EPS estimates in each of the trailing four quarters.

The stock climbed 119.2% year-to-date and has returned 130.9% over the past year to close the last trading session at $114.43.

SKYW’s POWR Ratings reflect strong prospects. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.

It has a B grade for Growth, Sentiment, and Quality. It is ranked #6 out of 25 stocks in the B-rated Airlines industry.

To access SKYW’s Value, Momentum, and Stability ratings, click here.

Travel + Leisure Co. (TNL)

TNL offers global hospitality services through two segments: Vacation Ownership, offering vacation ownership interests, and resort management. Travel and Membership offers vacation exchanges, travel memberships, rentals, and booking technology solutions.

On November 6, 2024, TNL announced a regular cash dividend of $0.50 per share on the company's common stock. The dividend was scheduled for payment on December 31, 2024, to shareholders who were on record as of December 13, 2024. It pays an annual dividend of $2, which translates to a dividend yield of 3.58% at the prevailing price levels.

TNL’s net revenues increased marginally year-over-year to $993 million in the fiscal third quarter that ended on September 30, 2024. Its operating income came in at $189 million. In addition, the company’s adjusted net income came in at $110 million, and adjusted EPS came in at $ 1.57, up 4% over the prior-year quarter.

Street expects TNL’s revenue for the fiscal year (ending December 31, 2024) to increase 2.8% year-over-year to $3.85 million. Its EPS for the same year is expected to grow marginally from the prior year to $5.71. In addition, it surpassed the consensus EPS estimates in three of the trailing four quarters.

Shares of TNL have gained 48% over the past year and 41.6% year-to-date to close the last trading session at $55.35.

TNL’s bright prospects are apparent in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.

It has a B grade for Value. Within the B-rated Travel - Hotels/Resorts industry, it is ranked #3 out of 20. 

Click here to see TNL’s ratings for Growth, Momentum, Stability, Sentiment, and Quality.

What To Do Next?

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EXPE shares rose $0.49 (+0.26%) in premarket trading Tuesday. Year-to-date, EXPE has gained 21.89%, versus a 28.19% rise in the benchmark S&P 500 index during the same period.

Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.

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