The travel industry, which saw a sharp decline during the pandemic, is on a clear path to recovery. As soon as pandemic restrictions were lifted, demand for vacations and adventures surged, showing no signs of slowing down. In this article, I have highlighted three overlooked travel stocks: Airbnb, Inc. (ABNB), Marriott Vacations Worldwide Corporation (VAC), and The Marcus Corporation (MCS), which seem poised to capitalize on the industry’s strong recovery.
Recent data from the UN Tourism’s World Tourism Barometer indicates that global travel is nearly back to pre-pandemic levels. In 2024, an estimated 1.4 billion international tourists traveled, just 1% shy of 2019’s numbers, reflecting an 11% increase from 2023. This strong recovery is being driven by robust demand from large source markets and the revitalization of Asian and Pacific destinations.
Moreover, during the recent winter holiday season, Americans planned longer and more frequent trips while increasing their spending compared to the previous year. For example, TSA throughput, which tracks airport passenger traffic, was up 7% year over year between December 20 and January 5, signaling increased consumer confidence and travel activity.
With demand ramping up, it’s expected that international tourist arrivals will grow by another 3-5% this year compared to 2024. Meanwhile, the global travel and tourism industry is projected to generate $955.90 billion in 2025, growing at an annual rate of 3.9%. On top of that, the U.S. alone is projected to contribute $224 billion to global travel revenues by 2025, making it the world’s largest travel spender.
With that in mind, let’s unpack the three overlooked travel stocks poised for a rebound, beginning with the third choice.
Stock #3: Marriott Vacations Worldwide Corporation (VAC)
VAC offers vacation ownership, exchange, rental, resort, property management, and connected companies, products, and services. The company creates, markets, and manages products relating to vacation ownership. Its segments include Vacation Ownership and Exchange & Third-Party Management.
On January 3, 2025, the company paid its shareholders a quarterly dividend of $0.72 per share, reflecting an increase of 4% over its previous distribution. “The dividend increase reflects our confidence in our leisure focused business strategy and growth potential, and upholds our continued commitment to providing value to our shareholders,” said Jason Marino, chief financial officer.
VAC pays a $3.16 per share dividend annually, which translates to a 3.61% yield on the current price. Its dividend payouts have grown at an impressive 41.7% CAGR over the past three years, while its four-year average dividend yield is 1.95%.
VAC’s trailing-12-month EBITDA and net income margins of 21.76% and 6.36% are 90.4% and 45.2% higher than their respective industry averages of 11.43% and 4.38%. Likewise, its trailing-12-month EBIT margin of 17.22% compares to the industry average of 8.03%.
For the fiscal 2024 third quarter ended September 30, 2024, VAC’s total revenue increased 10% year-over-year to $1.31 billion. The company’s income before taxes and non-controlling interest grew 78.8% from the prior-year quarter to $118 million. Also, its net income increased 100% year-over-year to $84 million, while its EPS stood at $2.12, up 94.5% year-over-year.
The consensus revenue estimate of $1.23 billion for the fiscal first quarter (ending March 2025) indicates a 2.8% year-over-year increase. Likewise, the consensus EPS estimate of $2 for the current quarter reflects a rise of 11.3% from the prior year. Moreover, VAC has surpassed its revenue and EPS estimates in three of the four trailing quarters, which is promising.
Over the past three months, the stock has gained 9.1%, closing the last trading session at $86.90.
VAC’s stance is apparent in its POWR Ratings. It has an A grade for Growth. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
Among the 20 stocks in the B-rated Travel – Hotels/Resorts industry, it is ranked #16. Click here to see VAC’s Value, Momentum, Stability, Sentiment, and Quality ratings.
Stock #2: Airbnb, Inc. (ABNB)
ABNB, together with its subsidiaries, operates a platform that enables hosts to offer stays and experiences to guests worldwide. The company’s marketplace model connects hosts and guests online or through mobile devices to book spaces and experiences. It primarily offers private rooms, primary homes, or vacation homes.
In terms of the trailing-12-month EBIT margin, ABNB’s 15.01% is 86.9% higher than the 8.03% industry average. Likewise, its 20.87% trailing-12-month Return on Common Equity is 93.5% higher than the 10.79% industry average. Furthermore, its 16.96% trailing-12-month net income margin is considerably higher than the 4.38% industry average.
ABNB’s revenue for the fiscal third quarter that ended September 30, 2024, increased 9.9% year-over-year to $3.73 billion. Its income from operations rose 1.9% from the year-ago value to $1.53 billion. The company’s net income and EPS attributable to Class A and Class B common stockholders for the quarter amounted to $1.37 billion and $2.13, respectively. Also, its adjusted EBITDA increased 6.8% over the prior-year quarter to $1.96 billion.
Analysts expect ABNB’s revenue for the quarter ended December 31, 2024, to increase 9.2% year-over-year to $2.42 billion, while its EPS for the same period is expected to come in at $0.58. It surpassed the consensus revenue estimates in each of the trailing four quarters.
The stock has gained marginally year-to-date to close the last trading session at $132.58.
ABNB’s POWR Ratings reflect this outlook. The stock has an A grade for Quality and is ranked #8 within the same B-rated industry.
Beyond what we stated above, we also have ABNB’s ratings for Growth, Value, Momentum, Stability, and Sentiment. Get all ABNB ratings here.
Stock #1: The Marcus Corporation (MCS)
MCS operates movie theaters, hotels, resorts, and a family entertainment center in the U.S. under brands like Big Screen Bistro, Big Screen Bistro Express, BistroPlex, and Movie Tavern by Marcus. It also provides hospitality management services, including check-in, housekeeping, and property management for vacation ownership developments and condominium hotels.
On December 16, 2024, buoyed by its strong financials, the company paid its shareholders a quarterly dividend of $0.07 per share of common stock. MCS pays an annual dividend of $0.28 per share, which translates to a 1.38% yield on the current price. Also, its four-year average dividend is 0.84%.
In November, Marcus Theatres, a division of MCS, launched its new movie membership service for $9.99 per month. Under this, members receive a monthly ticket credit, 20% off food and drinks, and unlimited $9.99 tickets for friends and family. Unused credits roll over, and members enjoy benefits like early access to screenings. This initiative is expected to drive customer loyalty and increase revenue for the company by attracting more frequent moviegoers.
MCS’ trailing-12-month asset turnover ratio of 0.64x is 32.2% higher than the industry average of 0.48x. Likewise, the stock’s 9.95% trailing-12-month CAPEX/Sales is 179.7% higher than the industry average of 3.56%.
During the third quarter, which ended September 26, 2024, MCS’ total revenue increased 11.4% year-over-year to $232.67 million. Its operating income rose 56.6% from the year-ago value to $32.78 million. The company’s net earnings amounted to $23.31 million and $0.73 per share, indicating an increase of 90.6% and 128.1% year-over-year, respectively. Also, its adjusted EBITDA came in at $52.28 million, up 23.5% over the prior-year quarter.
Street expects MCS’ revenue for the fourth quarter (ended December 31, 2024) to increase 9.1% year-over-year to $176.17 million, while its EPS for the same period is expected to be $0.05. In addition, MCS has topped consensus revenue estimates in each of the trailing four quarters, which is impressive.
MCS’ stock has surged 68% over the past six months and 51.8% over the past year to close the last trading session at $20.80.
MCS’ POWR Ratings reflect its strong outlook. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system.
It has an A grade for Growth and a B for Sentiment. Within the same industry, it is ranked #6 of 22 stocks. To see additional POWR Ratings for Value, Momentum, Stability, and Quality for MCS, click here.
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ABNB shares . Year-to-date, ABNB has gained 0.89%, versus a 2.68% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
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