Yahoo Finance Time for Leisure & Travel ETFs?
The leisure industry is continuing its recovery with the ebbing pandemic. Leisure industry watchers and researchers believe that the Fed will achieve its soft landing in 2023. Even baking in a soft recession this year, they’re still expecting relatively high occupancy, revenue per available room (RevPAR) and hardly any impact on the room rate.
While experiencing a decline since February, travel spending in the United States in March exceeded 2019 levels by 4%. In March, overseas arrivals showed signs of improvement, reaching their highest level since the pandemic began but still remaining 25% below 2019 levels.
Invesco Dynamic Leisure and Entertainment ETF PEJ, ALPS Global Travel Beneficiaries ETF JRNY, ETFMG Travel Tech ETF AWAY, Defiance Hotel Airline and Cruise ETF CRUZ, AdvisorShares Hotel ETF BEDZ and AdvisorShares Restaurant ETF EATZ are available to tap the winning momentum.
Let’s delve a little deeper.
Hotel Industry in Good Health
According to Michael Bellisario, senior hotel research analyst and director at Baird, the hotel industry experienced a rise in stock prices during April. The main factor behind this increase was the strong performance of global hotel brands. Despite the uncertainties in the macroeconomic landscape and ongoing banking turmoil, RevPAR trends remained robust. Additionally, the first-quarter earnings exceeded expectations, leading to positive revisions in the full-year estimates, as quoted on STR Global.
The global hotel brands outperformed the S&P 500, achieving a return that was approximately 100 basis points higher, equivalent to just over 2.5%. In the week 7-13 May, hotel occupancy was down 2% from the comparable week in 2022. Average daily rate was up 3.4% while Revenue per available room was up by 1.3%, per STR Global. Deteriorated comparisons than the week prior was expected and normal given seasonal slowdown and the adverse impact from the Mother’s Day calendar shift.
Strong Resilience in Restaurant Industry
U.S. restaurants continued to boost employment with restaurants adding 24,800 jobs last month, according to preliminary data from the Bureau of Labor Statistics (BLS). In the first quarter of 2023 alone, the industry added about 180,000 jobs.
The industry remains a leading job creator in the private sector, having added tens of thousands of jobs each month this year. As the summer continues, it is set to create thousands more seasonal positions. The recent job growth in April further emphasizes the resilience of restaurants despite broader economic difficulties.
Preliminary data from the U.S. Census Bureau reveals that eating and drinking establishments recorded total sales of $88.1 billion in April, as quoted on restaurant.org. Compared to March's figure of $87.6 billion, this reflects a 0.6% increase, although it remains below the recent high of $89.3 billion observed in January.
In April, restaurants continued to recover a larger portion of consumers' expenditures, with non-restaurant retail sectors experiencing a 0.4% rise in total spending. This marks the 14th instance in the last 15 months when restaurant sales growth surpassed gains in overall retail sales.
Bottom Line
As the world emerges from the pandemic, the U.S. travel industry is experiencing an unprecedented resurgence. The industry's adaptive strategies, including enhanced safety protocols and digital transformations, have instilled confidence in travelers, leading to a robust recovery.
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ETFMG Travel Tech ETF (AWAY): ETF Research Reports
Invesco Dynamic Leisure and Entertainment ETF (PEJ): ETF Research Reports
AdvisorShares Restaurant ETF (EATZ): ETF Research Reports
AdvisorShares Hotel ETF (BEDZ): ETF Research Reports
Defiance Hotel, Airline, and Cruise ETF (CRUZ): ETF Research Reports
ALPS Global Travel Beneficiaries ETF (JRNY): ETF Research Reports
