The travel industry is roaring back to life in 2024, making it a great time to consider the top overlooked travel stocks to buy. Pent-up demand, relaxed travel restrictions and a new sense of wanderlust are driving a surge in bookings.
While airlines are often the first stocks that come to mind for travel investors, this resurgence extends far beyond traditional carriers. These companies represent the different facets of the travel experience, offering investors a diversified approach to capitalizing on the travel boom. With interest rate cuts on the horizon, these travel stocks are set for a massive rebound.
Now, let’s unpack the top three overlooked travel stocks to buy now!
Booking Holdings (BKNG)
Booking Holdings (NASDAQ:BKNG) is a behemoth in the global travel industry, owning notable brands like Booking.com, Priceline, Kayak and Agoda. This diversified portfolio allows Booking Holdings to capture travelers across various price points and booking preferences.
One of Booking Holdings main competitive advantages is its wide moat and powerful digital platform. The company has invested heavily in technology, including its large customer review database. That has created a user-friendly experience, translating into higher customer satisfaction and repeat bookings. Additionally, Booking Holdings’ vast amount of customer data allows for targeted marketing campaigns, maximizing its reach for its various brands.
Over the last 3 years, the company has averaged 47% revenue growth, and its EPS and FCF have increased substantially. In FY23, gross travel bookings increased 24% year-over-year (YOY) to $150.6 billion. Net income skyrocketed by 40% or $117.40 per share. The company hit an impressive milestone in the 2023 fiscal year of more than 1 billion rooms booked on its platforms. Management remains confident in the long-term tailwinds in the travel and leisure sector, making Booking Holdings a no-brainer travel stock to buy.
Airbnb (ABNB)
Airbnb (NASDAQ:ABNB) has revolutionized the lodging industry, offering travelers unique and often budget-friendly travel options. The company has thrived since the 2020 COVID pandemic and is set to benefit from the increase in travel demand in 2024.
Airbnb’s peer-to-peer model allows its hosts to monetize their space, providing a unique experience and a diverse range of properties. The variety sets Airbnb apart from the traditional hotel industry, creating an entirely new travel segment. Additionally, Airbnb continues to leverage the most up-to-date technology to streamline guest communications and bookings. Its unique offerings cater perfectly to the trends of travelers seeking more personalized and locally-emersed experiences.
The 2023 fiscal year was a transformative year for the company, with its hosting community surpassing an astonishing 5 million users. Revenue increased 18% YOY to $9.92 billion, with active listings exceeding 7.7 million. Furthermore, Airbnb is crafting a robust artificial intelligence strategy with its GamePlanner.AI acquisition. The company is already leveraging LLMs and machine learning to help streamline the customer experience. That makes Airbnb one of the best-overlooked travel stocks to buy in 2024.
Uber Technologies (UBER)
Uber Technologies (NYSE:UBER), primarily known for its ride-hailing service, is emerging as a major player in the broader travel industry. Beyond connecting passengers with rides, Uber offers services like food deliveries, bike rentals and microtransit options.
Uber currently operates in 72 countries and more than 10,000 cities worldwide. The company has fully diversified its offerings to include other services like Uber Eats and Uber Freight. That has opened up new revenue opportunities and further increased its mission of driving shareholder value and profitability. Furthermore, the company may have reached a key inflection point in 2023, as they instill confidence in shareholders about the company’s long-term growth prospects.
In FY23, Uber’s audience grew even larger, with the platform averaging nearly 26 million daily trips. Gross booking volume remained robust, up 19% YOY to $137 billion. Additionally, EPS swung from negative to positive, with FCF skyrocketing 762% YOY to $3.36 billion. The company continues to invest in new growth opportunities while proving to adequately manage its Capex. As travelers become more comfortable relying on app-based services for transportation, Uber stands to be one of the largest beneficiaries.
On the date of publication, Terel Miles did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
