ETFs
5 ETFs Set to Soar on Busiest Memorial Day in Two Decades – May 22, 2024
This Memorial Day holiday weekend will likely see record-breaking travelers hit the road and take to the skies. According to travel service provider American Automobile Association (“AAA”), this summer travel season will be the busiest in nearly two decades.
An increase in travel demand is expected to boost revenues and profitability of the travel and tourism sector, thereby leading to higher stock prices. Investors can capitalize on this trend through ETFs that stand to benefit greatly from the upbeat Memorial Day travel trend. ETFMG Travel Tech ETF (FAR – Free report) , Defiance ETF for hotels, airlines and cruises (CRUZ – Free report) , ETF ALPS Global Travel Beneficiaries (JRNY – Free report) , AdvisorShares Hotel ETF (BEDZ – Free report) And ETF Themes Airlines (AIRL – Free report) look like intriguing choices.
Busy Travel Trends
According to AAA, approximately 44 million Americans will travel 50 miles or more over Memorial Day weekend (May 23-27), an increase of 4% from last year. This would represent the second busiest Memorial Day weekend ever. Of those, a record 38.4 million are expected to take a car trip, 3.5 million would fly, and 2 million would take trains or other modes of transportation (including buses and cruises).
Road travel is expected to reach its highest level since AAA began tracking data in 2000 and increase 4% from last year, driven by a drop in prices at the pump. The national average gas prices declined for the fourth straight week heading into Memorial Day weekend and are expected to stay in the mid-$3 range through most of the summer, per GasBuddy (see: all consumer discretionary ETFs here).
According to Hopper’s data, car rentals for the long weekend will cost an average of $43 per day, about the same as last year. Rental demand will be highest in Atlanta, Georgia, Boston, Massachusetts, Las Vegas, Nevada, and Orlando, Florida, with most renters expected to pick up their cars on May 23-24.
This Memorial Day weekend will also be the busiest at airports since 2005. Airfares are comparable to last year, with only a 1-2% increase in domestic flight prices. Hotel stays average $212 per night this year, according to Hopper data. This is slightly higher than average summer prices. Meanwhile, the Federal Aviation Administration expects this Memorial Day weekend to be the busiest for air travel in more than a decade. It expects more than 53,000 flights on Thursday and 50,000 on Friday.
Travelers search for theme parks and entertainment venues in Orlando, New York, Las Vegas and Southern California. Seattle, WA, Anchorage, AK, and Vancouver are top destinations due to the popularity of Alaska cruises this time of year. Florida’s beaches and cruise ports will also be crowded. European cities dominate the international list, according to AAA.
ETFs expected to rise
ETFMG Travel Tech ETF (FAR – Free report)
ETFMG Travel Tech ETF is the first ETF that provides direct access to the global technology-driven travel and tourism industry. It tracks the Prime Travel Technology Index, charging investors 75 basis points in annual fees. ETFMG Travel Tech ETF holds 31 stocks in its basket, with US companies accounting for 36%, followed by 13% each in Australia and the UK (read: Travel ETF (FAR – Free report) hits a new 52-week high).
ETFMG Travel Tech ETF has accumulated $86.8 million in its asset base and trades an average daily volume of 14,000 shares.
Defiance ETF for hotels, airlines and cruises (CRUZ – Free report)
The Defiance Hotel, Airline, and Cruise ETF tracks the BlueStar Global Hotels, Airlines, and Cruises Index, which measures the performance of globally listed companies primarily engaged in the passenger airline, hotels and cruises. With 64 stocks in its basket, US companies represent 47.6% of the portfolio, while Liberia, the UK and Panama round out the next three with single-digit exposure each.
The Defiance Hotel, Airline and Cruise ETF has amassed approximately $32.3 million in its asset base and charges 45 basis points in annual fees. The volume is lower since it trades on average around 12,000 shares per day.
ETF ALPS Global Travel Beneficiaries (JRNY – Free report)
The ALPS Global Travel Beneficiaries ETF provides diversified exposure to the global travel industry by tracking the S-Network Global Travel Index. The fund invests in 76 companies operating in reservation and rental agencies, airlines and airport services, hotels, casinos and cruise lines, as well as travel-related companies identified through search algorithms. machine learning, such as luxury retail, entertainment, leisure, food and beverage and payment processing providers.
The ALPS Global Travel Beneficiaries ETF has accumulated $6.3 million in its asset base and charges 65 basis points in annual fees. JRNY trades an average daily volume of 1,000 shares (read: Focus on Disney ETFs after second quarter results).
AdvisorShares Hotel ETF (BEDZ – Free report)
AdvisorShares Hotel ETF is actively managed and provides exposure to the global hotel and lodging industry and its associated services. It holds 27 stocks in its basket, with U.S. companies making up about 85% of the basket.
AdvisorShares Hotel ETF charges 99 basis points in annual fees and trades an average daily volume of 1,000 shares. He has amassed $3.4 million in his asset base.
ETF Themes Airlines (AIRL – Free report)
The Themes Airlines ETF provides exposure to the 31 largest airlines by market capitalization by tracking the Solactive Airlines Index. US companies account for the largest share of the basket at 47.8%, followed by UK companies at 11.8%.
Themes Airlines ETF has managed assets worth $0.5 million and charges 35 basis points in annual fees. It trades an average daily volume of less than 500 shares.
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