Courtesy of an uptick in personal income and wages, traveling by car, train or plane is expected to be high this Thanksgiving. More Americans will hit the roads or take to the skies, a number that would surpass the levels of the past 13 years.
Given this near-term surge in travel demand, investing in travel and leisure companies will be judicious. As bulk of the travel is expected to be via road, rental car giants are surely poised to be among the biggest gainers. An uptick in travel during the holiday period will certainly boost airlines, while pre-tax profits of all major airlines are already on the rise. Another investment option is hotel and resort companies. More travel will lead to increase in hotel occupancy rate and in turn revenue per available room will scale higher.
Thanksgiving Travel to Hit 13-Year High
According to the American Automobile Association (AAA), about 54.3 million travelers are likely to travel 50 miles or more. This would be the highest since 2005. Thanksgiving Day weekend travel is anticipated to increase 4.8% from last year.
About 89.4% or 48.5 million travelers are expected to travel by car, indicating an increase of nearly 5% over last Thanksgiving. Modes of transport including cruises, trains and buses are expected to make up 2.8% of all travel this Thanksgiving, serving around 1.48 million.
However, the largest growth in holiday travel is by air. About 4.27 million travelers are expected to opt for flights, which is 5.4% higher than the year-ago level. Flights are expected to account for 7.8% of all travel this Thanksgiving.
(Source: American Automobile Association)
Airports to Be Busy, Pre-Tax Profits Up
Airlines for America (A4A), the trade group representing the interests of U.S. airlines, in fact, projected that 30.6 million passengers are expected to fly in the upcoming weekend, which is up from about 29 million passengers in the same period last year. The trade organization expects Nov 25 to see 3.06 million commuters on U.S. carriers. The next busiest day is expected to be the Wednesday before Thanksgiving — Nov 21.
