A higher number of travelers are expected to travel this Labor Day holiday weekend. AAA booking data shows Labor Day weekend to be the busiest, with domestic bookings rising 4% and international bookings climbing 44% over last year, driven by higher cruise-ship reservations.
Investors seeking to tap this trend could consider ETFs that stand to profit big time from an upbeat Labor Day travel weekend. U.S. Global Jets ETF JETS, Defiance Hotel, Airline, and Cruise ETF CRUZ, ALPS Global Travel Beneficiaries ETF JRNY, AdvisorShares Hotel ETF BEDZ and Kelly Hotel & Lodging Sector ETF HOTL look like intriguing picks. An increase in travel demand should boost revenues and profitability for the travel and tourism industry, thereby leading to higher share prices.
The Transportation Security Administration (TSA) expects to screen more than 14 million passengers during the Labor Day holiday weekend from Sep 1 through Sep 6. This is up nearly 11% over the same weekend last year. The busiest day is projected to be Sep 1, when TSA expects to screen over 2.7 million travelers passing through security checkpoints. Every seat is expected to be filled on many planes this weekend, capping a busy summer.
American Airlines (AAL) expects to carry nearly 3.5 million passengers on about 32,000 flights between Thursday and next Tuesday. United Airlines (UAL) predicts this to be its biggest Labor Day weekend ever, with nearly 2.8 million passengers in the six-day stretch.
Europe, Canada Emerge as Hot Destinations
International hotel bookings for the Labor Day weekend jumped 82% from last year, with international cruises up by 44%. Top global travel destinations include Vancouver, Rome, London, Dublin and Paris. Cooler temperatures and stunning scenery are luring travelers to Canada, while the loosening of pandemic restrictions has raised the travel appeal to Europe.
Domestically, cruise bookings are up 19%. Alaskan cruises are in high demand. Florida remains a favorite due to its port accessibility. The top U.S. destinations for the holiday weekend are Seattle, Orlando, Anchorage, New York City and Las Vegas.
For travelers hitting the road, gas prices are expected to remain almost the same as last year. The national average for a gallon of regular was $3.81 on Labor Day 2022.
ETFs to Gain
U.S. Global Jets ETF (JETS)
U.S. Global Jets ETF provides exposure to the global airline industry, including airline operators and manufacturers from all over the world, by tracking the U.S. Global Jets Index. The product holds 51 securities and charges 60 bps in annual fees.
U.S. Global Jets ETF has gathered $1.6 billion in its asset base while seeing a heavy trading volume of nearly 3 million shares a day. JETS has a Zacks ETF Rank #3 (Hold).
Defiance Hotel, Airline, and Cruise ETF (CRUZ)
Defiance Hotel, Airline, and Cruise ETF tracks the BlueStar Global Hotels, Airlines, and Cruises Index, which measures the performance of globally listed companies primarily engaged in the travel and tourism industries. Holding 57 stocks in its basket, American firms make up 47.9% of the portfolio, while Panama, Liberia and the United Kingdom round off the next three with single-digit exposure each (read: Tap These Stocks & ETFs to Play Like Billionaires).
Defiance Hotel, Airline, and Cruise ETF has gathered around $50.9 million in its asset base and charges 45 bps in annual fees. Volume is lower as it exchanges around 55,000 shares a day on average. CRUZ has a Zacks ETF Rank #3.
ALPS Global Travel Beneficiaries ETF (JRNY)
ALPS Global Travel Beneficiaries ETF provides diversified exposure to the global travel industry by tracking the S-Network Global Travel Index. The fund invests in 75 companies engaged in booking and rental agencies, airlines and airport services, hotels, casinos and cruise lines, along with travel-related companies identified through machine learning algorithms, such as luxury retail, entertainment, leisure, food and beverage and payment processing vendors.
ALPS Global Travel Beneficiaries ETF has accumulated $6.3 million in its asset base and charges 65 bps in annual fees. JRNY trades in an average daily volume of 1,000 shares.
AdvisorShares Hotel ETF (BEDZ)
AdvisorShares Hotel ETF is the actively managed and only ETF investing exclusively in global hotel and travel-related services. AdvisorShares Hotel ETF holds 25 stocks in its basket that are pretty spread across components.
AdvisorShares Hotel ETF charges 99 bps in annual fees and trades in an average daily volume of 1,000 shares. It has amassed $4.3 million in its asset base.
Kelly Hotel & Lodging Sector ETF (HOTL)
Kelly Hotel & Lodging Sector ETF tracks the Strategic Hotel & Lodging Sector Index, which measures the performance of companies that specialize in providing hotel, motel, lodging, residential and timeshare properties management services, operational services, including lodging platform services (e.g., global marketplaces for private accommodations) and companies that own or lease hotels, motels, lodges, resorts, timeshare properties. It holds 37 stocks in its basket, with a concentration on the top four firms.
Kelly Hotel & Lodging Sector ETF has accumulated $0.7 million in its asset base while charging 78 bps in annual fees. It trades in an average daily volume of about 500 shares.
U.S. Global Jets ETF (JETS): ETF Research Reports
This article originally appeared on Zacks
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