Some trading sectors have benefitted very largely from COVID19. Technology, fast office furniture and some takeaway hospitality sectors are good examples of business whose share prices have benefitted from COVID19. Be-en-large though as of March/April of 2020 both the ASX and their American markets (NYSE, DOW and NASDAQ) experienced sharp falls in both share price and profitability.
One of the sectors who suffered most from these falls was travel. Hawaiian Holdings Inc. (HA) for example who is the parent company of Hawaiian airlines was trading at almost $30USD in their peak prior to COVID19 and today are struggling to hold $14USD which is a decrease of almost half the value.
Similarly, tourism and hospitality have also been affected in the same way with travel giant Expedia Inc. (EXPE) experiencing a drop of almost 70% in the immediate days after the market crash and still trading at 20% down on their peak.
However, this may not be set to continue with many banks beginning to upgrade their ratings on travel stocks which should have originally stayed quite low for the coming multiple years. Using that same example, Expedia, for example, the major consensus between the biggest banks in America is that the stock is currently bullish and may experience further growths of 21% over the next 12 months. Credit Suisse recently rated the stock as a buy with the price target at $125USD.
Whilst this is a positive sign that the travel sector is by-en-large internationally recovering from the COVID19 pandemic, there’s something that makes me think travel is in for a larger scale recovery prior to the end of 2020. In a confidential filing in the last week of August, Airbnb gave intention to partake in an initial public offering prior to the end of 2020.
That development is extremely important for travel, with Airbnb being one of the big travel tech start-ups of the 2010s and in many cases the prop-up to local tourism. The company’s IPO is considered to be akin to many of the big IPOs over the last ten years such as Tesla. It’ll also be a fantastic test as towards whether confidence is slowly being restored in the travel sector. And all signs point to the fact that this confidence is most definitely on its way to being restored.