The tourism industry is gearing up for a robust trajectory as we head into the latter part of this year. Despite the recessionary headwinds in play, traveler enthusiasm hasn’t waned, making it apt to consider the best travel stocks to buy.

Moreover, credit card giant Mastercard (NYSE:MA) reports that the global cruise and airline sectors have hit new spending highs on nine of the last ten days this year. Also, travelers are looking to stay for longer, adding an extra day to their vacations compared to pre-pandemic times.

With this in mind, the article looks at three of the best travel stocks to buy, which stand out from their peers. These stocks offer a compelling blend of value and potential for growth, particularly as we approach a potential interest rate hike. Notably, these companies have managed to maintain their strong profit margins despite pricing pressures, a testament to their robust business models. Hence, the optimism surrounding the travel industry is running high, making it a prudent choice for portfolio diversification.

Travel Stocks to Buy: Airbnb (ABNB)

Airbnb (NASDAQ:ABNB) is dominant in peer-to-peer lodging and experience booking. Despite multiple headwinds weighing down its business over the years, it has proven remarkably resilient. Its 3-year average revenue growth shows this, which stands at an enviable 44%. Moreover, the growing consumer trend toward travel and experiential spending points to an even brighter trajectory ahead for ABNB. 

While ABNB’s first-quarter (Q1) performance may not have met the stock market’s expectations, it still managed to deliver impressive results. Despite the guidance for the upcoming quarter falling short of expectations, the company’s financial strength remains evident. 

Revenues surged 18% surge to $2.14 billion, beating the consensus estimate of $2.06 billion. The platform’s strong top-line performance was mainly linked to significant gains in nights and booked experiences. More importantly, its net income soared 126% year-over-year (YOY) to a record $264 million. Also, Airbnb generated a robust $1.9 billion in net cash from operating activities and free cash flow for Q1.

Therefore, with its tremendous financial health and leadership position in its niche, ABNB stock is an excellent buy-the-dip candidate.

Hilton Worldwide (HLT)

Hilton Worldwide (NYSE:HLT) is a titan in the hotel industry. With its mix of comfort and upscale locations, the hospitality giant has effectively met the demands of amenities-seeking travelers. 

HLT has been an excellent stock to hold, posting double-digit growth across multiple post-pandemic quarters. Last year was particularly impressive, with its stock jumping over 44%, a testament to its robust recovery and market confidence.

Its recently released Q1 report saw it comfortably exceeding analyst earnings expectations, considerably increasing its full-year outlook. Revenue increased a healthy 12.2% to $2.57 billion during the period, led by gains in ‘franchise and licensing fees’ from increased hotels and higher occupancy rates. Additionally, its EPS of $1.53 shot up by 11 cents, its 9th consecutive quarterly earnings beat.

Moreover, Hilton’s management has done remarkably well in refining business operations for peak efficiency. Its adept adaptation to market trends makes it a standout player in the hospitality sphere.

Royal Caribbean (RCL)

The cruise industry has rebounded impressively post-pandemic. Despite the return to normal booking rates, many debt-laden cruise line operators are buckling under the pressures of higher interest rates. However, with the expected interest rate cut later this year, borrowing costs will likely decrease, boosting cruise lines like Royal Caribbean (NYSE:RCL). 

RCL, in particular, has been experiencing robust demand, with its stock up north of 55% in the past year. It reported a record Wave Season, led by incredible April bookings in terms of volume and pricing, leading to comfortable top-and-bottom-line beats. Additionally, net yields surged 19.3% in constant currency due to higher ticket prices and fleet improvements. 

In its Q1 earnings call, CEO Jason Liberty highlighted the stellar performance of existing and new ships, particularly the Icon of the Seas, which blew past expectations. This monstrous success underpins the firm’s confidence in achieving its 2024 financial goals and capturing a bigger slice of the $1.9 trillion global vacation market. 

As we advance, RCL forecasts second-quarter (Q2) EPS between $2.65 and $2.75, outperforming the $2.37 consensus. It also projects its EPS to fall in the $10.70 to $10.90 range against a consensus of $10. 

On the date of publication, Muslim Farooque did not have (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