by Hilary Kramer | August 1, 2013 10:00 am
Summer vacations are in full swing, and with only one month to go before school starts back up, families are trying to squeeze in their vacations before heading back to the daily grind.
Personally, I love summer. There’s more running around now that my kids are getting a little older, but I love the extra quality time I get to spend with my family and the fun places we travel to.
If you’re like me, you rely heavily on the Internet when making travel plans. It’s not only a great place to research potential destinations and read reviews from other vacationers, but you can also find the best deals on a getaway.
That’s why more and more people around the world are turning to the Internet when it comes to travel. Industry research firm eMarketer has estimated that Internet ad spending around the globe will grow from roughly $100 billion in 2012 to about $163 billion in 2016 – a compound annual growth rate (CAGR) of about 12%.
Of that tally, online travel sales as a percentage of all travel sales are about 40%, and should reach 46% in 2016. One major catalyst for this growth is increased smartphone and mobile device usage. International Data Corp. estimates mobile travel spending has been growing at about 40% a year, and will be about $2 billion in 2014.
As an investor, I love trends like that, and this one is no exception. I’ve recently recommended two related plays to my readers.
The first is HomeAway (AWAY), the world’s leading online marketplace of vacation rentals. With cautious consumers still watching their wallets, many are turning to vacation home rentals as a popular and economical alternative to hotels. AWAY’s bevy of web sites include over 711,000 paid listings of homes for rent in 171 countries. The sites put travelers in direct contact with property owners who can showcase pictures, availability and pricing for homes, condos, villas and cabins.
It also has great global reach. On its site, almost every country in the world is represented, giving travelers nearly limitless options. Its portfolio of websites is growing, too, with sites ranging from Germany and France to Brazil and Australia. I also really like management’s ability to smartly capitalize on deals by offering big savings on nightly rates.
For example, a night in New York City runs $219, while a hotel is $350 on average. A night in Rome is $180 versus $222 for a hotel. The larger size of the dwelling can also accommodate larger groups for those traveling with children, extended family (including the dog-friendly properties!) or for special events such as graduation.
The second company is one of the largest online travel platforms in the world. Originally a spinoff from Expedia.com (EXPE) in December 2011, the company currently boasts 200 million unique monthly visitors and more than 100 million reviews and opinions, spanning every facet of travel imaginable, from airlines and hotels to car rentals and local sights.
While there is some competition from Internet peers with deeper pockets, this stock has a huge platform and visibility, with a growing new product in a fragmented market. This company also has impressive revenue and earnings growth and room to grow in underpenetrated international markets.
If you like profiting from strong trends as much as I do, take a look at some of the opportunities related to online travel. (If you’d like to see full details on these two recent recommendations, you can click here for information on how you can join GameChangers.) You may not only find a great deal, but you may pay for your vacation as well in the profits you make!
Note: Technology has changed the game everywhere, not just online travel. I’m releasing a brand new pick tomorrow in my GameChangers service that has proven software and technology to help energy companies find and produce oil and gas more cheaply–including its move into “4D” map views. You can still be among the very first to get my full analysis on this stock when the August issue of GameChangers is released tomorrow. Click here to learn how.
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