ETFs to Tap Surging Summer Travel Demand

As summer heats up, travelers look all set to experience adventures and leisure travel. According to recent surveys, about 50% of adult travelers plan to travel more this summer compared to last year, as quoted on Yahoo Finance.

This Fourth of July, a record 70.9 million Americans are likely to hit the road, marking a 5% rise from last year. Lower gas prices than last year, which is currently averaging $3.45 per gallon and is likely to stay stable through Labor Day, will make this spree more affordable.

Meanwhile,demand for European vacations is especially surging. Popular destinations like Amsterdam, Barcelona and Paris have witnessed a considerable uptick in room rates, up about 10% for summer travel. Major airports across the United States are gearing up for an eventful summer, with over 57,000 flights scheduled to Europe alone.

Air Travel Trends

Air travel has also been thriving, with 5.7 million Americans projected to fly over the holiday weekend alone. Domestic airfares have slumped 18% from last summer, averaging $263 per ticket for the Fourth of July weekend.

The International Air Transport Association (IATA) said in early June that global airlines raised their profit forecast for 2024, projecting industry-wide revenues just shy of $1 trillion, driven by a record number of travelers boarding flights (read: Time for Airlines ETFs on Raised Profit Forecast for 2024?).

Passenger yields, or the average amount paid by a passenger to fly one mile, are likely to rise by 3.2% year over year due to constrained capacity growth. However, cargo yields are expected to slump by 17.5% in 2024 as freight markets return to normalcy after a pandemic boom.

Paris appears to be a favorite international destination this summer, thanks mainly to the upcoming Paris Olympics scheduled to start in late July. Japan, particularly cities like Tokyo, Osaka and Kyoto, is also likely to notice a momentum in summer travel growth.

Meanwhile, air trips to Canada and the Caribbean are available for under $500 round-trip, while European outings average around $900 round-trip, according to Hopper data, as quoted on Yahoo Finance. These figures appear affordable for U.S. tourists, leading to a boom in travel.

Why Consider Travel ETFs?

Every segment within the travel industry stands to benefit from this trend, making travel ETF investing appealing. Against this backdrop, U.S. Global Jets ETF JETS, Themes Airlines ETF AIRL, Travel & Vacation Bull 2X ETF Direxion OOTO, Defiance Hotel Airline and Cruise ETF CRUZ, ETFMG Travel Tech ETF AWAY, ALPS Global Travel Beneficiaries ETF (JRNY) and AdvisorShares Hotel ETF BEDZ are some of the ETFs that investors can keep track of.

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Amplify Travel Tech ETF (AWAY): ETF Research Reports

U.S. Global Jets ETF (JETS): ETF Research Reports

AdvisorShares Hotel ETF (BEDZ): ETF Research Reports

Defiance Hotel, Airline, and Cruise ETF (CRUZ): ETF Research Reports

Direxion Daily Travel & Vacation Bull 2X Shares (OOTO): ETF Research Reports

Themes Airlines ETF (AIRL): ETF Research Reports

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