Some investors fear news that U.S. officials would recommend a break in the use of the Johnson & Johnson Covid vaccine could affect the travel industry and consumers’ willingness to take a trip this summer.
Travel stocks have seen mixed returns: the JETS ETF, for example, is down 7% from March highs, while online travel agent bookings are only 3% off their.
BTIG digital services analyst Jake Fuller, who covers actions such as Booking and Airbnb, sees no long-term impact of the latest hurdles in launching the vaccine.
“Any delay in vaccinations will certainly cause the trip to recover a bit, but most importantly, it won’t derail the inevitable,” Fuller told CNBC’s “Trading Nation”.
Fuller gives three reasons why he remains bullish in the travel industry. The first, he said, is how consumers behaved last year during the appearance of the stalls.
“We saw it last summer, you’ll see it again this year. People want to go out, people will take vacations,” he said.
His second point is that the industry will only adapt. Instead of resorts and airports, people will prioritize home rentals and road trips.
Finally, any slowdown this year will be offset in the coming years, he says.
“Whether the distribution of the vaccine is delayed in the short term or not, it doesn’t really derail what we expect in the 2022 and 2023 period. .
However, the industry is not without risks. Aside from any resurgence in Covid cases, Fuller says online travel bookings can succumb to the natural cycle of the business.
“It’s a mature business. So once the recovery phase is over, I think you’re looking for online travel growth that looks a lot more like the underlying travel industry, for example, a 3, 4, 5, 6 It is no longer a 10 From 15% to 15% growth in the industry, and that probably keeps a cap on advanced valuations, “he said.
BTIG has a neutral rating on Booking, TripAdvisor and Airbnb. However, the company has a purchase rating and a target price of $ 180 on Expedia, based on bullish market share projections. Expedia shares closed Tuesday at $ 51.69 and are up 29% this year.