It’s June and summer is officially here. An increasing number of Americans are traveling. According to Generali Global Assistance’s Travel Insurance, summer vacationing will shoot up 68% in 2018 from 61% in 2016. Also, per a survey by campaign group Project: Time Off, workers in the United States took an average 17.2 days of vacation in 2017, the highest since 2010.
Also, millennials are spending like never before on leisure trips that comprise outdoor activities such as camping, hiking, boating and fishing. Understandably, leisure travel is growing among Americans with more hotel room bookings and passengers flying out this summer.
Moreover, a bullish economy and high consumer confidence bode well for travel and leisure. Given this scenario, it makes for a good time to invest in travel and leisure stocks in June.
Vacationing to Soar in Summer
According to Marriott International’s newly released Second Annual U.S. Summer Travel Trends Report, 50% of Americans will be taking their longest vacation this summer. The survey also says that 68% of Americans will be vacationing this summer. This is primarily because of consumers’ expanding economic health. After a dip in 2016, summer vacationing picked up in the last two years and is expected to grow further this year.
Moreover, according to an Airlines for America report, around 9 million more passengers are estimated to fly this season. Moreover, an average 246.1 million passengers are estimated to travel on U.S. airlines between Jun 1 and Aug 31, up 3.7% from the same period in 2017.
Also, according to TravelClick, hotels in the United States witnessed significant growth in the April-June quarter of 2018 across all segments, with booking increasing 1.4% and average daily rates (ADR) rising 2.7%. Understandably, vacation rate is rising among Americans with an increasing number of millennials willing to shell out more on trips.
Millennials and Leisure Activities Drive Vacationing
More than half of millennials (56%) have plans of taking more trips this summer compared with last year. Moreover, one third of the millennials don’t mind spending $5,000 on their vacation this year, the most by any age group. Interestingly, an increasing number of millennials prefer to indulge in outdoor activities while vacationing. This has led to a considerable rise in outdoor activities such as camping, boating and hiking.
According to Department of Agriculture, 148 million Americans travel with a variety of outdoor pursuits annually, with 50% of the population participating in outdoor recreational activities.
Per an Outdoor Industry Associations report, more than $887 billion is spent on various outdoor recreation activities annually. That said, an increasing number of Americans are spending more on buying outdoor activity equipment and gears. Americans spend $31 billion annually on high-quality camping accessories. Naturally, with summer in full swing and an increasing number of millennials willing to vacation, outdoor act is expected to see a spike.
Last year, 22 of the 25 busiest traveling days were between Jun 1 and Aug 31, which proves that vacationing increases during summer. Moreover, an increasing number of Americans, led by millennials are willing to spend more on traveling and outdoor activities, thanks to a bullish economic outlook, higher wages, high consumer spending and consumer confidence. So it makes sense to add leisure stocks to your portfolio in June for a chilled-out summer portfolio.
However, picking winning stocks may be difficult. We have narrowed down our search to the following stocks based on a Zacks Rank #1 (Strong Buy) and other relevant metrics.
Johnson Outdoors Inc. (NASDAQ:JOUT) is a leading global outdoor recreation company that claims to turn ideas into adventure with innovative, top-quality products.
Johnson Outdoors has expected earnings growth of 28.3% for the current year. The Zacks Consensus Estimate for the current year has improved by 23.8% over the last 30 days.
Malibu Boats Inc (NASDAQ:MBUU) operates as a designer, manufacturer and marketer of sport boats primarily in the United States.
Malibu Boats has expected earnings growth of 56.4% for the current year. The Zacks Consensus Estimate for the current year has improved by 8.4% over the last 30 days.
Las Vegas Sands Corp. (NYSE:LVS) is a hotel, gaming, and retail mall company headquartered in Las Vegas, NV. The company owns The Venetian Resort Hotel Casino, the Sands Expo and Convention Center, Venetian Interactive and Venetian Macao Limited.
Las Vegas Sands Corphas expected earnings growth of 21.4% for the current year. The Zacks Consensus Estimate for the current year has improved by 9.5% over the last 60 days.
Rocky Brands Inc (NASDAQ:RCKY) is a leading designer, manufacturer and marketer of premium quality footwear and apparel marketed under a portfolio of well recognized brand names including Rocky Outdoor Gear, Georgia Boot, Durango, Lehigh, and the licensed brand, Dickies.
Rocky Brands has expected earnings growth of 29.3% for the current year. The Zacks Consensus Estimate for the current year has improved by 4.3% over the last 60 days.
Columbia Sportswear Company (NASDAQ:COLM) is a global leader in design, sourcing, marketing and distribution of active outdoor apparel and footwear, with operations in North America, Europe and Asia.
Columbia Sportswear Company has expected earnings growth of 12.4% for the current year. The Zacks Consensus Estimate for the current year has improved by 3.1% over the last 60 days.
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