Travel Stocks in Focus This Week Amid Surge in Leisure Demand

By Liz Moyer

Investing.com -- Travel stocks are in focus this week, with JetBlue Airways Corp (NASDAQ:JBLU) falling short of expectations on higher fuel prices, though it still sees a return to profitability this fall.

The carrier, which just won its battle with Frontier Group Holdings Inc (NASDAQ:ULCC) to buy Spirit Airlines Inc (NYSE:SAVE), said it lost 47 cents a share in the second quarter, and revenue rose just 63%. That compares to a 79% jump in revenue for American Airlines Group (NASDAQ:AAL) over last year’s second quarter.

JetBlue stock was down more than 5% on Tuesday.

Every airline has reported higher fuel prices and labor constraints, and has said capacity growth will be constrained until conditions improve. But as American Airlines said, travel demand is booming compared even to pre-pandemic levels.

That’s good news for investors in travel-related stocks. Also on Tuesday, Marriott International Inc (NASDAQ:MAR) beat expectations, with revenue jumping 70% from last year. Gains in revenue per room were led by a jump from international markets. Marriott shares rose 1.4%.

The hotel giant is forecasting better than expected earnings for the third quarter and full year.

Hilton Worldwide Holdings Inc (NYSE:HLT) last week raised its guidance as well, seeing strong travel demand through the end of the year.

Later Tuesday, hotel-alternative Airbnb Inc (NASDAQ:ABNB) reports earnings, and travel planning site Booking Holdings Inc (NASDAQ:BKNG) will also report. Both should offer investors more insights on travel and consumer spending trends.

Airbnb is expected to report earnings of 45 cents on revenue of $2.1 billion. Bookings, which operates Priceline and OpenTable among other sites, is seen reporting EPS of $18.25 a share on revenue of $4.3 billion. That would be more than twice last year’s revenue.

But a downside to the travel demand surge is overwhelmed travel services. British Airways said Tuesday it was suspending ticket sales of short-haul flights leaving London’s Heathrow airport through the middle of the month. The airport had asked carriers to cap ticket sales so it could manage passenger volume.

Shares of British Air parent International Consolidated Airlines Group (LON:ICAG) (OTC:ICAGY) fell 1% on Tuesday.