US travel continues resurgence

This is what happens when you have a competent government. Vaccines unleash pent-up demand. The US is entering a rude travel boom. Mobility is surging:

Free at last. Thank god almighty

Free at last. Thank god almighty

Credit card spending on travel is surging:

Boosted by stimulus:

TSA numbers are climbing fast:

Reaching takeoff!

Reaching takeoff!

My base case is that US travel overshoots this year and next as family, recreational and business (think conventions etc) surge back with pent-up demand. Long term, though, I expect a lower travel profile for business especially as structural changes to online habits persist.

That’s what happens when you use vaccines to turn COVID-19 into a nasty cold:

As opposed to huddling under the doona while being lied to by the inept Morrison Government:

Ain't no travel 'ere.

Ain’t no travel ‘ere.

The rebound is coming here too but tens of billions of dollars later than it should have.

David Llewellyn-Smith

Comments

  1. reusachtigeMEMBER

    You’ve got to admire the Americans and their bravery. Fark Covid, they’re flying and packing out stadiums for the footy. We cower in the corner at a whiff of a sniffle.

  2. BubbleyMEMBER

    Flight Centre could be a reasonable choice then

    Currently trading at $18.95 but traded at around $36 for most of 2019 – pre pandemic. That’s about 46% below its average price.
    Once every ones been vaccinated, I’m expecting a massive bounce in international tourism. So with that sort of spread I’m thinking FLT is likely to make a large jump in the next 6-12 months, based on the US experience.

      • BubbleyMEMBER

        There is plenty of grounded equipment and folded airlines. Getting the hardware isn’t an issue yet.

        Short term, its getting bums in seats – which is where flight centre could be a viable option.

        When the pandemic broke, it was about “what do people want”. They wanted PPE, they wanted sofas (ie Temple and Webster) and they wanted entertainment (Netflix etc)
        When things go back to the new normal, people are going to want to travel, and their first stop will be … a travel agent, then accomodation (hotels Airbnb’s ) and other tourism related things, maybe luggage companies?
        To me this is where short term opportunities lie in the post covid bounce.

        • In the case of GE (which I own a small part of), their aviation arm makes money from lucrative service contracts of maintenance, etc. Their cash flows were in fact positive for the calendar year of 2020 despite all the COVID induced downturn in the sector. Now, all the backlog of deferred engine overhauls, etc., is about to hit the market with the imminent resumption of air travel resurgence…..

          • BubbleyMEMBER

            Those are some great points. I’d forgotten about the maintenance side and temporarily moth balled aircraft will need plenty of it.

    • Bubbley,
      But they have almost twice as many shares on issue after the equity raising, so they are close to their 2019 mkt cap again, which is pricing in a very clean & quick recovery…

  3. DLS, you’ve had some strange positions in the past but this one is a doozy.

    America did the pandemic right and we did it wrong… wow, just wow.

  4. Speaking on Fox News Sunday and Meet the Press April 4, epidemiologist Michael Osterholm PhD, MPH, an adviser to President Biden on the COVID-19 pandemic, made the obvious point in terms of the global nature of the coronavirus pandemic and warned that people had better pay attention. Overall, he said, “we’re in a category 5 hurricane status with regard to the rest of the world. We’ll see in the next two weeks the highest number of cases reported globally, since the beginning of the pandemic. As for the United States, we’re just at the beginning of the surge.” Osterholm, who runs the University of Minnesota’s Center for Infectious Disease Research and Policy (CIDRAP), said he agreed with the remarks made last week by Dr. Rochelle Walensky, director of the Centers for Disease Control and Prevention (CDC), to the effect that the situation in the United States was not at all under control—she reported she felt a sense of “impending doom”—and stating that Americans weren’t being realistic about the spike in new cases nationwide. M
    oreover, Ostholm warned, that spike was being driven by the COVID variant B.1.1.7, the British strain.

    Dr. Osterholm elaborated: “We are the only country in the world right now experiencing this increasing number of cases due to this variant, and at the same time opening up, not closing down. The two basically are going to collide, and we are going to see substantially increased numbers of cases.” He especially warned that the variant is now hitting children much harder than previous strains. “It infects kids very readily.” More broadly, he pointed to reports of surging cases around the country, especially in the Upper Midwest where “they’re just beginning to start the fourth surge.” Look at what happened on April 3 in Michigan where there were a record number of 8,400 cases in one day. “That should have been a wakeup call to everyone.” It’s also the case, he pointed out, that there are more people between the ages of 30 and 50 who are being hospitalized and seen in ICUs.

    Other states with similar reports of increased cases include Ohio, Minnesota, Nebraska and Pennsylvania. Dr. Bruce Vanderhoff, head of Ohio’s Health Department, warned that “Ohio remains in a race against a virus that is now more contagious and right back on our heels.”

    • SoCalSurfCreeperMEMBER

      It’s a race with the vaccines. I have no doubt cases will increase. People here are concerned about hospitalization and death more than case counts.

      There are plenty of kids and my sons high school that have covid right now. All the parents and grandparents are vaccinated however (wealthy area, so not 100% representative), so it’s not spreading in families beyond the kids. Thankfully so far none of the local kids have more than a cold. Many have almost no symptoms. No doubt at some point one of them could be unlucky, but rates of severe illness in kids remains very very low.

      From next week everyone in California 16 and older is eligible for vaccination. I have to say at this point the speed and efficiency of vaccination is astounding. The state of California is averaging almost 400,000 shots per day. Nobody is complaining anymore.

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