2 travel-related stocks to buy as countries begin to lift COVID restrictions

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The fast and furious spread of Omicron this winter disrupted the nascent recovery the travel and tourism industry had hoped for in 2022. This after two years of pandemic-related travel closures and restrictions.

Yet, as more countries recognize the endemic nature of COVID-19, global tourism is on the path to a long-term sustainable recovery. Major tourist destinations are removing travel restrictions, encouraged by the mildness of the Omicron variant and the proliferation of vaccinations that are keeping deaths low.

The European Union is lifting pandemic-related travel restrictions, allowing member countries to scrap quarantine and testing for vaccinated travelers traveling within the bloc. The UK, following the success of booster programs and vaccinations, removed all testing requirements for fully vaccinated eligible from February 11.

As this trend develops, it will help major travel-related businesses improve revenue and recover from the worst of the pandemic-related crisis. Below, we’ve shortlisted 2 stocks that could experience a sustained rally this year.

1.Airbnb

Airbnb (NASDAQ:), the alternative accommodation booking technology platform, is one of our favorite travel stocks to own for the long haul. Its stocks are now perfectly positioned to benefit from pent-up travel demand, with consumers more than ready to pack their bags and move freely.

The market continues to underestimate the brand advantage of this online travel services company and the strength of its extended stay business. According to Bloomberg analysis, ABNB reserves analysts’ expectations of $2 billion to $4 billion (3% to 7%) in 2022, as the San Francisco-based company’s unparalleled direct traffic to the site and its superiority vis- vis-à-vis regular customers will allow him to increase profits by reducing marketing expenses.

Yet the Airbnb stock lacks momentum. Shares have fallen 21% over the past year as the travel recovery remains elusive. However, the stock has held up better than other growth-focused companies this year and overall technology, which is down about 12% year-to-date. Airbnb, which reports fourth quarter 2021 results after Tuesday’s close, ended trading Friday at $166.53, little changed for the year.

CEO Brian Chesky told CNBC last month that he expected bookings to skyrocket once restrictions on international travel eased. He said:

“Before the pandemic, half of our business was cross-border. As borders reopen, it will be another tailwind for us.”

2.Visa

US payments giant Visa (NYSE:) is another security with which to enjoy a strong rebound in international travel as the world moves into the endemic phase of this virus.

V TTM weekly

The world’s largest payment network told investors last month that spending on its cards hit a record high in the last three months of 2021, even as the highly contagious variant of Omicron disrupted travel.

Spending through Visa’s network soared 20% to $2.97 trillion in its fiscal year. Customers outside the United States account for more than 50% of Visa’s revenue.

Visa Chief Financial Officer Vasant Prabhu told Bloomberg that Omicron’s impact has been relatively light from a business perspective and fairly quick to pass. He added:

“People are now learning to live their lives with the virus and we’re just not seeing the same impact you might have seen at the start of the pandemic.”

Visa stock, after surging to $250 a share over the past summer, is down more than 10% from that level. It closed Friday at $224.69.

V Consensus estimate

Chart: Investing.com

Of 38 analysts polled by Investing.com, 35 have an “outperform” rating on the stock. Their 12-month consensus price target shows an upside of almost 19% from the current price.

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