Travel, Hospitality Stocks Rise on Hopes for Reopening
By Dave Sebastian
Shares of travel-reliant businesses rose Tuesday amid optimism
in the potential development of a coronavirus vaccine and economies
reopening after a monthslong pause in operations due to the
The Dow Jones U.S. Travel and Leisure Index rose about 3.6%.
Though spending on hotels, restaurants, airlines and other
industries hurt by social distancing remain low, it appears to be
picking up. Hotel occupancy rates in the U.S. have risen for five
straight weeks, according to data tracker STR, offering a glimmer
of hope that the start of the summer will foster a recovery. Shares
of Marriott International Inc. rose about 4.9%, Hilton Worldwide
Holdings Inc. about 5.8% and Hyatt Hotels Corp. about 7%.
Six Flags Entertainment Corp., whose shares were up about 9.2%,
on Tuesday said it is reopening its Frontier City park in Oklahoma
City starting June 5. Shares of other theme parks followed, with
SeaWorld Entertainment Inc. up around 7.8% and Cedar Fair LP about
Airlines have taken off, too. The German government and Deutsche
Lufthansa AG on Monday said they agreed on a EUR9 billion euro
($9.81 billion) bailout deal, one of the largest aid packages by a
single country hatched so far in the air-travel sector. American
depositary shares of Lufthansa rose 7.6%. Shares of United Airlines
Holdings Inc., American Airlines Group Inc. and Delta Air Lines
Inc. were up 13.5%, 11.9% and 9.9%, respectively.
UBS analysts raised the price target of Southwest Airlines Co.
to $41 from $37 on hopes for domestic travel recovery. Shares rose
"We view LUV as the best way to play a recovery in the U.S.
airlines given the absence of a bloated balance sheet coupled with
network that lends itself to where the recovery will happen first
(domestic and then leisure) and more flexibility in its fleet than
almost any player given the 737MAX contractual claims with Boeing,"
the analysts said in a note to clients.
Shares of Carnival Corp., the world's largest cruise operator,
rose 12%. It plans to resume eight cruises beginning Aug. 1.
Norwegian Cruise Line Holdings Ltd., which suspended voyages
through July 31 and is internally planning for third-quarter
sailings, was up 13.8%, while Royal Caribbean Cruises Ltd. was up
Write to Dave Sebastian at email@example.com
(END) Dow Jones Newswires
May 26, 2020 12:24 ET (16:24 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Historical Stock Chart
From Jul 2020 to Aug 2020
Historical Stock Chart
From Aug 2019 to Aug 2020