When the Great Recession set in after the 2008 economic crisis, luxury vacations were far from the minds of most Americans, some of whom are still embarking on their own road to recovery. The rise of "staycations" and other cost-cutting measures inevitably drew investors to move away from the travel and hospitality industries. However, as American consumers continue to rally, some investors argue that the time has come to revisit these areas.
Recently, Hodges Capital Management founder Donald Hodges spoke with Forbes staff writer and investment expert Wallace Forbes about the current state of the travel industry, and why airline stocks may soon become a hot commodity.
"They haven't done well over a long, long period of time but [airlines are] beginning to do well because they're beginning to learn how to make money," Hodges told the source. "Their biggest percentage moves have already been made but we could still see 20-30 percent gains from here over the next 18 months."
Hodges noted that this area has become much less competitive as less successful airlines have gone out of business, but those remaining in operations have enjoyed higher-occupancy flights in recent years.
Though airline stock may be on the rise by Hodges' estimation, the hotel industry doesn't appear to have such a promising trajectory, according to the analysts at Zacks Equity Research. The source notes that the hospitality sector in certain tourist-magnets including New York and San Francisco has shown signs of growth, but argues that this initial resurgence could be shortlived if job creation within the leisure industry continues to lag.
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Categories: Stock News