Summer season is approaching, how can the Taiwan-U.S. tourism industry seize the opportunity? Hotel stock investment guide and layout recommendations

As the haze of the pandemic gradually dissipates, the global tourism industry has entered a recovery trajectory. Interestingly, after the return of crowds, the prices of tourism-related services have continued to rise, and the public’s tolerance for travel expenses has exceeded expectations. With summer vacation approaching, can this wave of tourism boost the stock prices of related industries? This article will analyze the current state of the tourism industry in Taiwan and the United States in depth, and recommend several hotel stocks and leading tourism sector stocks worth关注.

The True Face of the Tourism Industry

The tourism industry chain covers a wide range, from food and accommodation, transportation, entertainment to itinerary planning, almost every link can be considered part of the tourism economy. But importantly, most related companies are not solely dependent on tourism revenue; hotels also engage in business hospitality, airlines also operate freight services.

Therefore, evaluating whether a company is worth investing in depends critically on the proportion of its revenue derived from the tourism sector. Only companies that truly rely on tourism business can demonstrate their strongest profitability during peak seasons.

The Dual Reality of Pandemic Trauma and Recovery

The impact of the pandemic on tourism was enormous, leading many companies to choose bankruptcy or drastic shifts. Surviving companies have adopted aggressive financing strategies—raising debt and expanding equity—to maintain operations. By 2022, as the global interest rate hike cycle began, these companies burdened with high-interest debt faced dual pressures.

Within this dilemma, there are also opportunities. After being confined for three years, people’s desire to travel has surged unprecedentedly, giving companies the chance to adjust pricing. As consumer price sensitivity decreases, most travel, accommodation, and transportation services have maintained high post-pandemic prices. Once high-interest debts are gradually paid off or interest rates fall, these companies’ profit margins will expand significantly.

Entering the summer peak season, many travel companies have already reported full bookings for hotels, cruises, and tickets, with these reservations gradually recognized as revenue and profit during the summer, becoming key indicators for investors.

The Current Situation and Opportunities in Taiwan’s Tourism Stocks

Regarding Taiwan’s tourism stocks, the top hotel stock recommendation is Regent (2707.TW). Compared to the mainly restaurant-based Wang Pin (2727.TW), Regent’s tourism characteristics are more prominent, with its hotels covering everything from backpacker inns to five-star hotels.

Regent’s recent strong performance is due to: sustained high occupancy rates, steady hotel price increases, continuous opening of new hotels, and stable growth in restaurant revenue. Even during the pandemic, the group proactively adjusted strategies, strengthening its F&B division to lay the groundwork for post-pandemic recovery.

A Panoramic View of the US Tourism Industry

Compared to Taiwan, US tourism-related companies are larger in scale and have a more complete industry chain. Many Taiwanese travelers’ daily booking and travel platforms are US-listed companies, indicating that US tourism stocks have greater growth potential and investment opportunities.

The Battle of Booking Platforms

Booking Holdings Inc. (BKNG) is a giant in online travel services, owning well-known brands such as Booking.com, Agoda, Priceline, and Kayak. The company’s revenue comes from three main channels: agency commissions, markup margins, and advertising income, with the first two accounting for over 90%. Booking’s business logic is similar to consumer giants like Procter & Gamble, ensuring that no matter how consumers choose, they will encounter its services through its brand matrix. CEO Fogel announced plans to incorporate AI technology to launch an all-in-one travel service, making trip planning more convenient, with promising growth prospects.

Airbnb (ABNB) has pioneered a different approach—connecting private landlords with travelers. According to its data, the average annual income for global hosts can reach $9,600, creating a mutually beneficial ecosystem. Compared to Booking, Airbnb only offers accommodation services and lacks features like car rentals, but its average nightly price is about $67, cheaper than most traditional hotels, attracting travelers seeking local cultural experiences and cost savings.

Airbnb’s core competitiveness lies in matchmaking and customer service, ensuring transaction security through user reviews, insurance mechanisms, and big data technology. Since the supply side consists of individuals with idle properties, its growth ceiling is much higher than traditional booking platforms.

Entertainment and Vacation Complexes

Disney (DIS) has attracted attention in recent years due to losses in its streaming business, but its main business remains theme parks and film/TV content. From 2010 to 2020, growth was driven by revenue from movies and parks; the decline mainly stemmed from falling advertising income. The company has successfully launched Disney+ and turned profitable. With a rich portfolio of IP assets, each successful film can extend into merchandise, theme parks, and other monetization channels. Currently undervalued, Disney’s stock presents a good long-term investment opportunity.

The Growth Drivers of the Cruise Market

Carnival Cruise Line (CCL) and Royal Caribbean (RCL) dominate the global cruise market, but with different strategies.

CCL targets the mass market, with price-sensitive travelers as its main customers, relying primarily on ticket sales, with lower onboard spending. RCL focuses on high-end clientele, with higher per capita spending and better profit margins.

Both benefit from the trend of consumers willing to spend more on travel—rising cruise fares, soaring hotel and airfare costs make cruises a more cost-effective vacation option. Additionally, aging populations increase demand for travel methods suitable for older adults. For investors interested in cruise stocks, RCL’s higher profit potential and customer base make its overall growth outlook more favorable.

The Leader in Global Hotel Chains

Marriott International (MAR), founded in 1927, has grown into the world’s largest hotel group, with brands covering luxury, upscale, and business segments. As consumer travel expenditure is expected to increase, Marriott has raised room rates accordingly, with global average RevPAR (Revenue per Available Room) increasing by 4.2% annually, and new rooms continuously opening—adding 46,000 rooms in 2023 alone.

Investing in Marriott can be seen as investing in a globalized version of Regent, with growth potential and regional diversification especially attractive to lower-risk investors.

Dual Beneficiaries of Gambling and Luxury Consumption

Sands Group (LVS) mainly operates in Macau and Singapore, both key development nodes. In Macau, tourism demand in Greater China continues to recover; Singapore is expected to become Asia’s financial hub after Hong Kong, with ongoing capital and visitor inflows. The group plans to increase investments in Singapore and Macau, with optimistic revenue prospects.

Risks and Opportunities in Investing in Tourism Stocks

The collapse of many hotels and airlines during the pandemic reminds investors that black swan events like infectious diseases can be devastating to the industry. Therefore, investing in tourism stocks requires a full understanding of external risks such as diseases and geopolitical issues.

Second, many tourist destinations have clear seasonal patterns. While stock prices may not rise immediately during peak seasons, tracking booking data, visitor flow, and fare adjustments can help anticipate companies’ profitability. For example, RCL has already announced that its 2024 cruise tickets are sold out, and prices are expected to rise in 2025, allowing investors to estimate next year’s revenue growth.

A precise investment evaluation method is to multiply this year’s revenue by fare increase rates to roughly estimate next year’s growth potential. For more accuracy, consider the repayment of high-interest debts due this year—interest expenses that were previously costs will disappear, directly increasing net profit. As travel expenditure continues to rise, profit margins in the tourism industry also have the potential to increase year by year.

Frequently Asked Questions

Q: Why are tourism stocks also called summer concept stocks?

A: Most outdoor attractions and water activities are more suitable for summer, and combined with summer vacations, they drive peak summer tourism. In contrast, winter has its unique scenery, but tourism activities and crowds are less abundant than in summer, so tourism stocks are also known as summer concept stocks.

Summary

As summer approaches, travel planning has become a top priority for many families. Whether you plan to go to the beach or cool mountains, investing in related service providers’ stocks can partly help your travel expenses appreciate in value.

Taiwanese investors optimistic about the tourism industry can focus on hotel stocks like Regent; those interested in US stocks can consider booking platforms like Booking and Airbnb, entertainment complexes like Disney, cruise companies RCL and CCL, and global hotel giants Marriott and Sands Group—all with their own investment characteristics. Choosing targets that match your investment style and risk tolerance, and making timely arrangements before the peak summer tourism season arrives, will be a wise strategy.