Travel Demand Remains Robust, and These 2 Stocks Could Benefit

The global travel industry continues to rebound, with demand for flights, hotels, and other travel experiences remaining strong. This is good news for investors in the sector.

Two companies that have recently commented on the strength of travel demand are Boeing and Marriott. In a recent interview with CNBC, Boeing CEO Dave Calhoun said that the travel demand recovery is “more resilient than imagined.” He also noted that the company's order books and demand for proposals to meet that market need are “as robust as [he's] ever seen in his career.”

Meanwhile, Marriott CEO Anthony Capuano also expressed optimism about the travel industry's outlook in a recent event. He said the company is seeing “robust demand” for travel across all segments and regions. He also noted that Marriott is “well-positioned to capitalize on the continued recovery of the travel industry.”

Marriott also said one trend it has seen is people extending stays or booking lengthier stays based on the rise of working from home. 

To capitalise on the robust travel trends, here are three stocks to watch:

Marriott (NASDAQ: MAR)

While Airbnb would be the obvious choice to capitalise on extended stays, customers have tended to opt for hotels in more recent times as they express frustration with extra fees and house rules implemented by Airbnb and the property owners. A number of hotels have introduced extended-stay brands in the last year or so, but Marriott, as mentioned above, is definitely one to watch. 

At its event, Marriott revealed a three-year growth plan through 2025, which impressed analysts. Macquarie analyst Chad Beynon said in a note following the event that Marriott delivered an “upbeat presentation focused on multiple growth initiatives.” He noted that the new growth model came in slightly ahead of consensus expectations.

The stock is up 33% this year, but some analysts and investors believe there could be more upside ahead.

Mastercard (NYSE: MA)

Mastercard is well poised to benefit on the back of strong international travel. The company makes money per transaction by charging processing fees per transaction. Those fees are increased when a transaction is made abroad. 

In July, BMO Capital analyst James Fotheringham raised the firm's price target on MasterCard to $488 from $463, keeping an Outperform rating on the shares. He noted that payment revenue was benefiting from the ongoing recovery in cross-border fees.

Mastercard shares have climbed 14% in 2023, but JPMorgan recently said it sees “healthy upside” for its top picks, of which Mastercard is one.