The global travel industry has demonstrated a remarkable resurgence following the COVID-19 pandemic, with international tourism receipts reaching USD 1.6 trillion in 2024, surpassing pre-pandemic levels by 4% in real terms. This recovery is further evidenced by the 1.1 billion international tourist arrivals in the first nine months of 2024, bringing the sector to 98% of its pre-pandemic activity.
In Canada, the tourism sector rebounded more swiftly than expected, with total tourism revenue projected to exceed 2019 figures by the end of 2023, reaching $109.5 billion.
The industry’s economic impact is substantial, with the World Travel & Tourism Council projecting a record-breaking contribution of $11.1 trillion to the global economy in 2024. This growth trajectory is expected to continue, with global gross bookings anticipated to reach $1.61 trillion in 2024 and $1.72 trillion in 2025, reflecting annual growth rates between 6-9% through 2026.
For those looking to profit from this industry’s expected revitalization, here’s what you should know about investing in travel stocks.
What are travel stocks?
Travel stocks are a widely diverse bunch. They touch on every aspect of tourism and travel, from hotels and airlines to booking companies and amusement parks.
They can be tech companies, like Airbnb, or hotel chains, like Marriott International. However different they seem, travel companies unite in that they sell experiences.
And those experiences are immensely profitable. The global travel and tourism sector is one of the world’s largest sectors. In 2023, the industry’s contribution to the global GDP reached approximately $9.9 trillion, accounting for 9.1% of the global economy.
Top travel stocks
Because travel stocks are so widely varied, it can be difficult to pick the best ones for your portfolio. So one thing to note: because travel stocks come from different market sectors, it’s not helpful to compare their valuation metrics. For example, you wouldn’t want to compare Air Canada’s price-to-earnings (P/E) ratio with the P/E of Airbnb, as the average P/E ratio for airlines is different from tech companies.
That said, here are a few solid front-runners in the travel industry, as well as two Canadian growth travel stocks that are worth watching.
| Travel Stock | Description |
| Airbnb (NASDAQ:ABNB) | Hospitality app that allows travelers to rent spaces from property owners across the world. |
| Booking Holdings (NASDAQ:BKNG) | World leader in online booking services. |
| Air Canada (TSX:AC) | Canada’s biggest airline service, serving around 50 million passengers annually. |
| American Hotel Income Properties REIT (TSX:HOT.UN) | American hotel REIT that develops and manages luxury hotels. |
| Transat A.T. Inc. (TSX:TRZ) | Canada-based tour operator headquartered in Montreal. |
1. Airbnb
Airbnb is a tech stock that has revolutionized the tourism industry. In the past, travellers had limited accommodation options, which often restricted where they could go. Airbnb has built a vast network of home stays that allows travellers to go where no hotel has gone before.
In the first three quarters of 2024, Airbnb reported strong financial performance, with total revenue reaching $8.25 billion. In Q1, revenue was $1.8 billion, reflecting a 20% year-over-year increase, while net income stood at $264 million, up 126% from the previous year. Q2 saw revenue rise to $2.75 billion, an 11% increase compared to 2023, with a net income of $555 million. In Q3, revenue grew by 10% year-over-year to $3.7 billion, with net income reaching $1.4 billion and a net income margin of 37%. These results highlight Airbnb’s continued growth and profitability throughout 2024.
Airbnb’s success rides on the fact its brand goes beyond “travel-as-vacation” to embrace “travel-as-a-lifestyle.” In this way, travellers with remote jobs can book experiences through Airbnb, combining work and travel with greater ease than we’ve ever seen before.
This work/culture combination will likely help this company grow tremendously, especially as more people seek out work remote lifestyles.
2. Booking Holdings
Booking Holdings is a massive digital travel agency that owns numerous iconic travel sites, such as:
- Booking.com
- Priceline.com
- Kayak.com
- Rentalcars.com
Over the years, Booking Holdings has built an empire in the online booking sector, where travellers can do everything from buying plane tickets to booking hotels to renting cards in a seamless experience.
Throughout the first three quarters of 2024, Booking Holdings demonstrated consistent growth across key financial metrics. In the first quarter, the company reported a 17% year-over-year increase in revenue, with operating income rising by an impressive 76%, alongside a 9% growth in room nights booked. Moving into the second quarter, gross travel bookings reached $41.4 billion, marking a 4% increase from the same quarter the previous year. Total revenues were reported at $5.9 billion, a 7% uptick, while net income rose by 18% to $1.5 billion compared to 2023.
The third quarter continued this upward trend, with total revenue reaching $8 billion, a 9% increase year-over-year, and adjusted EBITDA growing by 12% to $3.7 billion, showcasing Booking Holdings’ robust performance and resilience in the travel industry.
With Booking Holding, one thing to watch for is scale. The company has grown extremely large, and it’s not exactly clear how it can continue to scale upward, especially with other competitors, like Airbnb, now dominating the space.
Even so, Booking Holdings remains a world leader in the travel space, one that could be a good investment.
3. Air Canada
Air Canada is Canada’s leading commercial air carrier, as well as the owner of Canada’s most popular travel rewards program, Aeroplan. Before the COVID-19 pandemic, Air Canada was flying around 50 million passengers a year, and in 2019 it even brought in $19 billion in revenue.
Throughout the first three quarters of 2024, Air Canada experienced mixed financial performance amid market challenges. In the second quarter, operating revenues reached C$5.5 billion, a 1.7% increase year-over-year, while operating income declined to C$466 million from C$802 million in Q2 2023, and adjusted EBITDA fell to C$914 million. The third quarter saw operating revenues of C$6.1 billion, a 4% decline year-over-year, with operating income dropping by C$375 million to C$1.04 billion and adjusted EBITDA decreasing to C$1.52 billion.
Despite a drop in passenger revenues, net income surged to C$2.035 billion, primarily due to a favorable tax asset recognition, while free cash flow improved to C$282 million.
Looking ahead, Air Canada is focusing on strategic growth, expanding its international network, and improving operational efficiency. The airline aims to strengthen its market position by increasing capacity, enhancing customer experience, and maintaining financial stability despite competitive pressures. While challenges such as fluctuating demand and cost management remain, Air Canada’s long-term strategy reflects a commitment to sustainable growth and resilience in the evolving travel industry.
4. American Hotel Income Properties REIT
Based in Ontario, American Hotel Income Properties REIT pools investor money and reinvests it in hotel real estate properties across the U.S. This real estate investment trust (REIT) doesn’t invest in just any old hotel, however. They invest in premium branded hotels, such as Marriott or Hilton.
American Hotel Income Properties REIT LP (AHIP) has demonstrated resilience and strategic agility. In the third quarter of 2024, AHIP reported a stable performance with a slight increase in same-property Net Operating Income (NOI). The company improved its portfolio by selling properties in Egg Harbor, New Jersey, and Houston, Texas, using the proceeds to reduce debt.
In January 2025, they further enhanced financial flexibility with a $43 million CMBS loan. Looking forward, AHIP focuses on capital management and efficiency. Analysts expect significant growth, projecting a 135.4% increase in earnings, a 0.6% rise in revenue per annum, and a 138% growth in earnings per share, indicating a positive outlook.
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5. Transat A.T. Inc.
Headquartered in Montreal, Transat is a growth stock company that specializes in organizing travel packages and tour operations in more than 60 destination countries.
The company is perhaps most well-known for its airline, Air Transat, which won World’s Best Leisure Airline by Skytrax in 2021, the fourth time it’s won the award. Before the pandemic, Transat had gotten so popular that Air Canada was going to buy it for $18 per share. Once air travel shut down, however, Air Canada backed out of the offer, and Transat nearly went out of business.
But Transat has endured, ending fiscal year 2024 with revenues of $3.28 billion, marking a 7.7% increase from the previous year thanks to a 10.1% rise in capacity and a 7.6% increase in traffic. In the fourth quarter, the company reported an adjusted EBITDA of $123.3 million, driven by higher traffic levels. Looking forward, Transat plans to expand its available seat-miles by 2% in fiscal 2025. Analysts expect the company to achieve profitability by 2026, with projected net income of approximately CA$36 million. These indicators suggest a cautiously optimistic future for Transat in the evolving travel industry.
Are travel stocks right for you?
If you’re interested in investing in growth or value stocks, then travel stocks might be right for you. The COVID-19 pandemic has left many great stocks trading at values below what they’re underlying companies are intrinsically worth. The pent-up demand for travel could help these companies regrow to pre-pandemic levels and possibly beyond.
Travel stocks, however, aren’t without their risks. As the pandemic showed, the travel industry is vulnerable and sensitive to global crises. In fact, the industry as a whole is cyclical, meaning travel stocks tend to move with the ups and downs of the economy.
When the economy is doing well, travellers have more disposable income and they can buy more plane tickets, book more hotels, and go on more cruises. During economic downturns and inflationary periods, however, travel companies could suffer losses, as travellers are less likely to spend as much on leisure activities.
If you’re more risk-averse, or you don’t want to handpick individual travel stocks, you could always invest in a travel-focused exchange-traded fund (ETF). They can help you diversify your holding, potentially spreading your money across numerous travel companies.
Common travel-focused ETFs in Canada include:
- Harvest Travel and Leisure Index ETF
- Dynamic Leisure and Entertainment Invesco ETF