FOXTROTS*

 

Travel stocks – December + January + 2000-18 review

December

Following almost-universal falls in travel stock prices in October, they were almost as bad in the last month of 2018. In Asia Pacific, Europe, US in December:

 

Airlines: biggest growth, Korean +4%; biggest fall, Hawaiian -34%. Hotels: Shangri-La +5%, Wyndham -14%. Tech: Lastminute +8%, eDreams -27%. Others: Genting +27%, Hertz -27%.

 

Previous month: Airlines: biggest growth, China Southern +26%; biggest fall, Easyjet -7%. Hotels: Wyndham +16%, NH Hoteles -16%. Tech: Travelport +2%, cTrip -13%. Others: HNA +37%, Thomas Cook -33%.

 

TBA Travel Stocks Index: World 206, Asia Pacific 96, Europe 175, US 345. Index previous month: World 222, Asia Pacific 98, Europe 184, US 384.

 

NVTT (Net Value Travel Tech) Stocks Index: 115; previous month 126.

 

Stockmarkets. Biggest growth Kuala Lumpur +1%; biggest fall Tokyo -10%. Previous month: biggest growth Hong Kong +6%; biggest fall Dublin -4%.

 

Comments:

Of the 81 travel stocks we track monthly, only 17 grew, of which nine were in Asia Pacific.

 

Among airlines (14 in AsPac, 10 Europe, 7 US) only Air New Zealand, Korean Air grew – none in Europe or the US.

 

Among hotels (10 in AsPac, 5 Europe, 9 US), we show Shangri-La as fastest. It was actually Belmond, +38%, but during the month that company agreed to be bought by luxury-group LVMH, boosting its stock price. However, it was actually one of the few companies to have grown in 2018; it was +50% above its end-2017 price before the LVMH offer was made public.

 

Of note is the market’s reaction following Jinjiang’s offer to buy the rest of Radisson Hotels from the (still)-troubled HNA group – JJ’s shares fell -10% in the month.

 

(Separately, HNA’s price – in our ‘Others’ category – fell in nine of the past 12 months, and ended the year -65% below its end-2017 price.)

 

We have long-thought that travel-tech companies (0 in AsPac, 3 Europe, 5 US) would perform better than other travel stocks. But more often more recently, travel-tech has matched the market.

 

In December, only two of our eight grew, and only three (including those two, Lastminute and Travelport) were above their end-2017 prices.

 

Among ‘Others’ (3 in AsPac, 8 Europe, 7 US) one notable fact in 2018 was the fall of the world’s two leading car-rental companies, Avis and Hertz. They almost take it in turns to be worst performer in our ‘Others’ category each month. Over the year Avis was -49% below its end-2017 price, Hertz -38%.

 

Stockmarkets (10 in AsPac, 9 Europe, 5 US) also had a bad month. Our best performer, Kuala Lumpur, was actually the only one to grow. And almost as bad as Tokyo was the -10% of Travel Weekly’s stock index in the US. (They are rounded; Tokyo was -10.5%, TW -10.3%.)

 

China stocks (6 plus 2 US-quoted) all fell – even its three main airlines (Air China, China Eastern, China Southern) which are do so well in business terms. If these falls are a reaction to the trade war started by the US, surely this is over-reaction?

 

 

 

 

 

January

Travel stock prices (US, Asia Pacific, Europe) in January.

Airlines: biggest growth, Southwest +24%; biggest fall, Norwegian -28%. Hotels: Wynn +32%, Shangri-La -12%. Tech: cTrip +25%, Trivago -2%. Others: Boeing +27%, Thomas Cook -5%.

 

TBA Travel Stocks Index: World 227, Asia Pacific 98, Europe 194, US 388.

 

NVTT (Net Value Travel Tech) Stocks Index: 125.

 

Stockmarkets. Biggest growth Istanbul +12%; biggest fall Kuala Lumpur -0.1%.

 

Comments:

-Of the leading growth stocks (and most of the others), their impressive-looking growths are actually a Dead Cat Bounce. Of our four categories, three were still below their end-2017 prices; only Boeing was ahead.

 

 

 

 

 

2000-18 review

Our report on travel stock prices* over the periods since 2015, 2010, 2000 is now available. As expected, there are a few shocks.

 

[] Europe.

-Total. In the eight years since 2010, AAGR (annual average growth rate) for stocks has been +3%.

-Airlines. 2010-8 AAGR +3%. Best performer Ryanair +14%, worst Air France-KLM -4%.

-Hotels. 2010-8 AAGR +4%. Best performer InterContinental +17%, worst Millennium & Copthorne -3%.

-Others. 2010-8 AAGR +3%. Best performer Airbus +22%, worst Thomas Cook -20%.

 

[] Asia Pacific.

-Total. 2010-8 AAGR -1%.

-Airlines. 2010-8 AAGR flat. Best performer All Nippon +38%, worst Thai -16%.

-Hotels. 2010-8 AAGR -3%. Best performer Mandarin Oriental flat, worst Banyan -9%.

-Others (only 3; two to 2015). 2010-8 AAGR -3%. Best performer China Travel +2%, worst Genting -10%. The 3rd company, China’s HNA, is new to our listing; it was -65% 2018 over 2017.

 

[] US.

-Total. AAGR 2015-8 (not 2010-18 as other regions; our full records had not started in 2010) +5%.

-Airlines. 2015-8 AAGR +11%. Best performer United +15%, worst Jet Blue -11%.

-Hotels. 2015-8 AAGR +12%. Best performer Belmond +38%, worst Wyndham -21%.

-Others. 2015-8 AAGR +3%. Best performer Boeing +31%, worst Avis Budget -15%.

 

[] Travel tech. AAGR 2015-8 (not 2010-18 as other regions; our full records had not started in 2010) +4%. Best performer Amadeus +14%, worst cTrip -17%.

 

[] Stockmarkets. 2010-8 AAGR +4%. Best performer Wellington +13%, worst Madrid -2%.

 

 

*A full report on this topic in our WYSK: What-You-Should-Know monthly-report contains some important additional information, qualification, and analysis – including ‘best’ and ‘worst’ based on differences between company price-  and stockmarket-movements.

 

 

The Fox. Remember, I’m an industry expert in the parallel world.

*Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance.

 

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