Humans are predictable creatures. Take something away from them that they like then they will get their payback later. In economics, this is called pent-up demand. In the US, where vaccine coverage is fast approaching critical herd immunity levels, the unleashing of pent-up demand has begun in the most singularly crushed sector of any by the pandemic: travel. BofA with the charts:
Book me a holiday or ten!
Spending is now up year on year but it is still only half what it was in 2019. To say the least, there is a lot of room for explosive catch-up growth here.
In Australia, sadly, our vaccine rollout has been badly mismanaged by the Morrison Government, but it will still progress and we expect the same outcome as vaccines slowly but surely displace lockdowns as the default mechanism for pandemic management.
As such, Aussie travel stocks are headed for a rerating. It has already started but many remain very heavily discounted and deep in value territory:
And yes, we own a good swag of them at home and abroad.
