I Am Buying This Travel Stock in 2023
Introduction
The travel and tourism industry has been experiencing a major transformation in recent years, with the emergence of new technologies, increased competition, and changing customer expectations. In this stock report, we will explore the current state of the travel and tourism industry, analyse the performance of key players in the market, and provide my outlook for investing in the sector in 2023.
In this stock report, we will explore the performance of a company, one of the world’s leading travel platforms, that has enormous influence on this ginormous industry. We will look at factors as to how it became one of the world’s largest travel sites, its acquisition by Expedia in 2004, and its subsequent spin-off in 2011, to form the company it is now. I will finish by giving my analysis of the stock, and where I think it could be headed next.
Market Overview
Overview
The travel and tourism industry is one of the world's largest and most dynamic industries. According to the World Travel & Tourism Council, the industry accounted for 10.4 per cent of global GDP and is expected to generate almost $9 trillion in 2027, with around 330 million jobs worldwide.
The travel and tourism industry comprises a variety of companies, including hotels, restaurants, tour operators, airlines, and cruise ships. Popular products offered by these companies include package holidays, hotel stays, private vacation rentals, camping, and cruises. The majority of the traffic that is directed to these companies and their products is through internet searches and social media.
Market growth
Revenue is expected to show an annual growth rate (CAGR 2022-2027) of 6.70%
Revenue in the Travel & Tourism market is expected to grow at a CAGR of 6.70% from 2022 to 2027, reaching a projected market volume of US$9 trillion by 2027.
The Hotels segment is the largest in the market, with a projected market volume of US$362.90bn in 2022.
The number of users in the Hotels segment is expected to reach 1.3 billion by 2027.
Additionally, online sales are expected to make up 74% of total revenue in the Travel & Tourism market by 2027.
Finally, the United States is projected to generate the most revenue in global comparison, with a total of US$175.40bn in 2022.
Online travel market size worldwide in 2020 and 2021, with a forecast for 2026
(in billion U.S. dollars)
Future of the Industry
As the global economy strengthens over time, there will be an increasing number of people with the resources and opportunity to travel, who weren’t previously able to. This presents a largely untapped market. For example, around 80% of the world's population has yet to experience flying in a plane.
As emerging markets develop, the population will become richer, now able to afford to travel. Companies that can capitalise on this vast consumer base, offering products and services within these countries, can gain huge earning potential.
Another factor to consider in the future of the travel and tourism industry is technological advancements. The use of data to personalise a customer’s experience can separate that company from its competition. For example, as artificial intelligence becomes more sophisticated, travel-based companies will be able to use algorithms and machine learning functions to provide superior services to their customer base. Those left behind in this race may struggle to keep up with consumer desires.