ETFdb Logo
  • ETF Database
  • Channels
    • Themes
      • Active ETF
      • Alternatives Channel
      • Artificial Intelligence
      • China Insights
      • Climate Insights
      • Core Strategies
      • Crypto
      • Disruptive Technology
      • Energy Infrastructure
      • ETF Building Blocks
      • ETF Education
      • ETF Investing
      • ETF Strategist
      • Faith-Based Investing
      • Financial Literacy
      • Fixed Income
      • Free Cash Flow
      • Innovative ETFs
      • Invest Beyond Cash
      • Leveraged & Inverse
      • Modern Alpha
      • Portfolio Strategies
      • Tax Efficient Income
    • Asset Class
      • Equity
        • U.S. Equity
        • Int'l Developed
        • Emerging Market Equities
      • Alternatives
        • Gold/Silver/Critical Materials
        • Crypytocurrency
        • Currency
        • Volatility
      • Fixed Income
        • Investment Grade Corporates
        • US Treasuries & TIPS
        • High Yield Corporates
        • Int'l Fixed Income
    • ETF Ecosystem
    • ETFs in Canada
    • Market Outlook
    • Crypto ETF Hub
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Database Categories
    • Indexes
    • Scenario Analysis
    • Watchlists
    • Head-To-Head ETF Comparison Tool
    • Mutual Fund To ETF Converter
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • Gaining Perspective Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. ETF Building Blocks Channel
  2. Travel Demand Returns, What ETF to Land On?
ETF Building Blocks Channel
Share

Travel Demand Returns, What ETF to Land On?

Roxanna Islam, CFA, CAIAJul 20, 2023
2023-07-20

Last week, I discussed the consumer discretionary sector making a big comeback in 2023 despite the overall market focus on innovation-oriented sectors like technology and communications services. Part of that has to do with softer second-half retail outlooks already priced into analyst and investor expectations. But perhaps the larger part has to do with a long-term shift in consumer spending habits. The pandemic caused an imbalance in goods purchases relative to services purchases. That has somewhat normalized over the past few months. But the ratio of goods-to-services purchases remains above historical levels. That means there still could be room for more services growth, particularly as we see demand rise in areas like travel. This note looks at what areas of the travel sector are performing best and how to invest in the travel rebound through ETFs. 

Cruise lines and passenger air segments are in the lead.

The best-performing stocks YTD in this segment have been cruise lines. Carnival Corp (CCL), Royal Caribbean Cruises (RCL), and Norwegian Cruise Line (NCLH) are up 119.7%, 99.8%, and 69.6%, respectively. These stocks were beaten down during the pandemic for several years and have just started to make a recovery although prices are still historically low. CCL, for example, is still down 65.2% from its price at the end of 2019. But the recovery in stock prices hasn’t just been a normalization from lows. Cruise lines have been reporting much higher demand. CCL recently reported bookings and customer deposits at all-time highs. Higher deposits have been driven by strong demand, bundled packages, and pre-cruise sales. The demand also extends to airlines. TSA passenger volumes are now back in line with 2019 levels. Delta Airlines (DAL) reported record revenue and earnings for 2Q23 citing strong travel demand including international flights and premium seats. Lower fuel expenses also contributed to the beat. The company predicts that strong demand will continue for years as consumer preferences continue to shift toward experience-based purchases.

Travel ETFs have very different

Content continues below advertisement

Travel ETFs have very different industry allocations.

Several travel ETFs range from broad-based travel ETFs, thematic ETFs, and airline or hotel segment ETFs. (CRUZ B-) is the broadest pure-play travel ETF and holds airlines, hotels, and cruise lines. Despite recent outperformance in cruise lines, CRUZ is the only travel ETF which holds these stocks (although you can also find them in broader consumer discretionary ETFs like (XLY A), for instance). While (JRNY B-) also holds hotels and airlines, it is a thematic play that also has an allocation toward travel beneficiaries like luxury goods and consumer finance. Some ETFs are targeted toward specific travel segments: (JETS C+) (which focuses on airlines), (BEDZ C+) and (HOTL B-) (which both focus on lodging), and (AWAY C) (which focuses on travel technology).

Travel ETFs Chart Image
JETS AWAY CRUZ JRNY BEDZ HOTL Graph

Bottom Line:

The travel rebound continues to support the goods-to-services shift. Consumers are cutting back on buying physical items, but continue to spend on experiences like restaurants and travel. Investors may want to use ETFs to take advantage of the travel rebound. Additionally, the rebound is across broad travel segments. And it’s based on long-term shifts, rather than individual company performance.

For more news, information, and analysis, visit the ETF Building Blocks Channel.

vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for JRNY, for which it receives an index licensing fee. However, RNY is/are not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of JRNY

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2025 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X