Site menu

Search by ticker code:
Generic filters


Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Why travel industry shares like Webjet (WEB) are soaring

Shares within the travel industry are soaring this week. COVID-19 knocked travel industries for six, but they are coming roaring back now. 

Shares within the travel industry are soaring this week. COVID-19 knocked travel industries for six, but they are coming roaring back now.

The backdrop for the travel sector

COVID-19 caused the Australian federal government to initially put up travel restrictions for passengers from certain countries. Eventually all international passengers were required to quarantine for 14 days.

In April 2020 Sydney Airport (ASX: SYD) reported that, compared to April 2019, domestic passengers dropped 97.9% to 49,000 and international passengers slumped 96.9% to 43,000. No wonder Virgin Australia (ASX: VAH) has gotten into financial strife.

This complete drop off of tourism is happening all over the world. It’s why the share prices of Flight Centre (ASX: FLT) and Webjet (ASX: WEB) fell so much and they had to do heavily discounted capital raisings.

What’s happening now?

The Webjet share price has risen 165% from the capital raising price. That’s an enormous return in just a couple of months. Webjet has gone up 9% today alone and it’s up 26% this week. Other travel shares are also rising with the Sydney Airport share price up almost 3% today, the Qantas (ASX: QAN) share price is up 5% and the Flight Centre share price is up 10%.

One of the biggest boosts this week is that Treasurer Josh Frydenberg said that jobkeeper could be extended for industries that are being heavily impacted like tourism.

Global travel restrictions are lifting. Countries and regions are encouraging their citizens to travel again. NSW wants people to go to regional areas of the state. Travel restrictions between states are getting closer to being lifted. Spain has lifted travel restrictions into the country. Indeed the EU would like there to be a holiday season to help some economies.

This is great news for shares like Webjet and Flight Centre. They don’t need flights between Australia and Europe to make money. They are global businesses, so just having customers book a hotel within their own country can make the travel agent businesses money.

Time to jump on travel shares?

Momentum is a powerful force. I’m not sure how much further the travel shares can run. Tourism will probably be reduced for some time. Webjet would probably be the one to watch over the next decade, though Auckland International Airport (ASX: AIA) could also be an idea with how low interest rates are right now.

However, I believe that a share like Bubs (ASX: BUB) could be an easier choice for long term success.

[ls_content_block id=”18457″ para=”paragraphs”]

Disclosure: at the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Skip to content