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Travel Rebound May Benefit Tech Shares

Technology-rich, asset-lite companies may be better-placed to benefit from a potential upturn in travel in the second half of this year.


Technology-rich, asset-lite companies may be better-placed to benefit from a potential upturn in travel in the second half of this year than airline, hotel and cruise operators which have to tie up capital, maintain equipment and compete on price.


Companies in the Prime Travel Technology Index facilitate bookings, reservations, ride-sharing, price comparisons and advice and are less exposed to price competition and commodity moves than airlines, hotels or cruise-line operators. The Prime Technology Travel Index is up nearly 5% so far this year compared with a 0.8% gain in the S&P 500.


For Avis Budget Group, revenue per day turned positive at the end of the fourth quarter driven by strong leisure pricing.

And despite the number of U.S. airport screenings falling to the lowest level in more than six months, according to the Transportation Security Administration, Delta Air Lines expects travel to increase over the peak summer vacation season and is returning 400 pilots to the controls. Marriott International is scheduled to open 100 properties in Asia Pacific this year. For Avis Budget Group, revenue per day turned positive at the end of the fourth quarter driven by strong leisure pricing. And Carnival CEO Arnold Donald said that most of the company’s fleet of cruise ships is likely to be back at sea by the end of 2021, and that once the trips start again, full passenger loads will return relatively quickly.


That’s not to say the rebound will be smooth and without risks. Infection rates may rise, new strains of the virus may emerge, vaccination programs may stall, and people without steady employment may be reluctant to spend on travel. But even a modest increase in travelers could have an out-sized effect on these asset-lite companies.Welcome to your blog post. Use this space to connect with your readers and potential customers in a way that’s current and interesting. Think of it as an ongoing conversation where you can share updates about business, trends, news, and more.


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