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Investment experts look for brighter skies in travel stocks heading into holiday season

  //stocks-investing.news-articles.net/content/202 .. n-travel-stocks-heading-into-holiday-season.html
  Published in Stocks and Investing on Wednesday, November 5th 2025 at 5:08 GMT by The Globe and Mail
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The travel sector’s post‑pandemic rebound

The article opens by noting that the travel industry is finally moving past the “low‑volume, low‑margin” phase of the pandemic. Demand is outpacing supply in many markets, with international and domestic travel bookings at levels that, in many cases, are exceeding pre‑COVID averages. Airlines report higher seat‑occupancy rates, and fuel prices—while still above historic lows—are more stable than the wild volatility seen in the first half of 2023. Cruise lines have resumed their pre‑pandemic itineraries with fewer restrictions, and hotel chains are filling rooms at record rates.

“The big picture is that consumers have pent‑up travel demand and a willingness to spend again,” said a senior portfolio manager quoted in the article. “That’s been the main catalyst for the surge in revenue per available seat mile (RASM) for airlines and for revenue per available room (RevPAR) for hotels.”

Key players and the ETFs that give exposure

Investors are looking beyond the headline names to a broader universe of travel‑related companies. Airlines such as Air Canada, WestJet, Delta Air Lines, United Airlines, Southwest Airlines, and the low‑cost carrier Ryanair are on many watchlists. The article notes that airlines with lower debt loads and strong liquidity positions are better positioned to weather the next potential shock.

Cruise operators have seen a resurgence in passenger volumes, and the industry’s top firms—Carnival, Royal Caribbean, Norwegian Cruise Line, and MSC Cruises—are showing strong earnings growth. “Cruises have a high return‑on‑capital, and their margins are improving as the cost of fuel is coming down,” the article says.

Hotel chains such as Marriott International, Hilton Worldwide, and InterContinental Hotels Group are also benefiting from higher RevPAR, driven by a recovery in business travel and an uptick in leisure bookings.

Beyond the traditional travel companies, the article highlights the role of online travel agencies (OTAs) and travel‑tech firms. Booking Holdings, Expedia Group, TripAdvisor, and Airbnb have all benefited from the surge in bookings, and their stock prices have reflected the higher traffic and spending.

To give investors a convenient way to invest across this sector, the article reviews two ETFs that have gained popularity: the iShares Global Travel & Tourism ETF (XTR) and the WisdomTree Travel ETF (WTRV). XTR offers exposure to a diversified set of global travel companies, with a focus on airlines and hotels, while WTRV provides a more selective blend of U.S. and international travel stocks, including a weight toward high‑growth tech‑enabled players. Both funds have shown a notable uptick in inflows during the last quarter, with XTR recording an inflow of $120 million and WTRV an inflow of $85 million.

What analysts are watching

While the headline optimism is clear, several analysts point to potential headwinds that could dampen the rally. Rising inflation could keep fuel prices elevated for longer than anticipated, squeezing airline margins. Labor shortages—particularly among pilots and flight attendants—could push costs higher and reduce the pace of capacity expansion. Travel restrictions, though currently low, could re‑emerge in response to new COVID variants or geopolitical tensions.

“Investment is still subject to macro‑economic conditions and global events that we can’t predict,” said a portfolio strategist quoted in the article. “But the fundamentals look solid for the travel sector to keep delivering growth, especially as we see the demand curve steepening.”

The article also cites a Bloomberg piece that analyses the sector’s earnings forecasts, noting that most consensus estimates for airlines and hotels have been revised upward in the last month. It links to a recent market commentary from CIBC that provides a deep dive into the sector’s valuation metrics, including P/E ratios and forward‑looking earnings multiples.

Bottom line for investors

In sum, the feature underscores a bullish view on travel stocks, buoyed by strong demand, improving operating metrics, and a favorable supply‑side environment. Investors are looking at both individual companies and ETFs as vehicles to capture this upside, while keeping an eye on potential risks such as fuel price volatility and labor market constraints.

The overall sentiment in the article is that the travel industry is poised for a sustained upward trajectory, provided that the macro‑economic backdrop remains supportive and that the sector continues to manage cost pressures effectively. As such, travel stocks and related ETFs are being positioned as key components in diversified portfolios that aim to capitalize on a resilient global travel market.