Some investors fear that news that US officials are recommending a halt to the use of the Johnson & Johnson Covid vaccine could have a ripple effect on the travel industry.
Travel stocks have achieved a mixed performance – the JETS airline ETF, for example, has fallen by 7% from March’s highs, while online travel agent Booking is only 3% of its own.
BTIG digital services analyst Jake Fuller, who covers stocks such as Booking and Airbnb, does not see the long-term impact of the latest obstacles in vaccine deployment.
“Any delay in vaccinations will certainly push a travel recovery a bit, but it’s important that it does not derail the inevitable,” Fuller told CNBC’s “Trading Nation” on Tuesday.
Fuller gives three reasons why he remains positive on the travel industry. The first, he says, is how consumers behaved during the downturn last year.
“We saw it last summer. You’re going to see it again this year. People want to get out, people are going on holiday,” he said.
His second point is that the industry will only adapt. Instead of resorts and airports, people will prefer house rentals and road trips.
Finally, the coming years will be compensated for any slowdown this year, he says.
“Whether or not the distribution of vaccines is delayed in the short term, it does not really derail what we expect in the time frame of 2022 and 2023. In short, we are looking fairly quickly for a complete recovery, very pent-up demand, said Fuller.
Yet the industry is not without risks. Aside from any revival in Covid cases, Fuller says online travel bookings could potentially succumb to the natural business cycle.
“It’s a mature business. So once we have a recovery phase, I think, look at the online travel growth that looks a lot more like the underlying travel industry, say 3, 4, 5, 6%. It’s no more.” n 10 growth to 15% growth, and it probably holds cover for valuations going forward, ”he said.
BTIG has a neutral rating on Booking, TripAdvisor and Airbnb. However, the company has a sales figure and $ 180 price target on Expedia, based on market share forecasts. Expedia’s share closed Tuesday’s trading at $ 51.69 and is up 29% this year.