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Three big travel stocks to watch in 2024

With the pandemic behind us and fears of a recession starting to subside, Wall Street expects a big year as the consumer remains resilient, particularly in the travel industry. As the travel sector saw a boom in 2023, many investors look for ways to add great travel plays into their portfolios.

As part of Yahoo Finance's Travel Guide 2024: Industry Insights special this week, Yahoo Finance Anchor Bradley Smith breaks down the travel stocks investors need to watch: Delta Air Lines (DAL), Marriott Hotels & Resorts (MAR), and Royal Caribbean Cruises (RCL).

Catch more of Yahoo Finance's Travel Guide 2024: Industry Insights special coverage this week, or watch this full episode of Yahoo Finance Live here.

Editor's note: This article was written by Nicholas Jacobino

Video transcript

BRAD SMITH: It's been a few years since COVID upended the global travel sector. The world is now largely vaccinated, the recession we were all hoping to avoid didn't happen, and the consumer is still spending. Oh, and the Fed is about to cut rates. So it looks like we're poised for another huge year. Well, maybe. But there are more than a few headwinds to contend with. Not to mention trends that could reshape the way that you think about your next vacation.


Is Delta the airline best positioned to hold market share? Are cruise lines about to hike prices on a stream of never ending demand? Is astrotourism really the next big hit for 2024? And should you really drive your Tesla from LA to San Francisco? Yahoo Finance's Travel Guide 2024, Industry Insights puts you at the center of the story, looking at planes, trains, automobiles, and any other form of transport you can think of.

We're diving deep into the travel sector as a part of Yahoo Finance's Travel Guide 2024, Industry Insights. Now, for investors looking to the best way to play the travel sector, I've got three stocks for you to watch as we gear up for those peak travel seasons. First, let's talk a little airlines. Let's go to the skies with the steel birds. It's got to be Delta here. Delta is really focused here on international.

And that's one of the themes that could really play out here and benefit them. You think back to why Citi has this as one of their 2024 stock picks for the year here. Well, it comes back to that international travel demand here. And from Ed Bastian, the CEO of Delta, what he's told us in the most recent earnings is what we see in our whole bookings is really more of the same that we've been seeing all year, international bookings and demand looks really strong.

That's what he told Yahoo Finance after they reported their most recent quarterly earnings. He also went on to say, so I think we're looking at a very, very strong Q3 as indicated by their guidance. And we'll have a strong Q4 as well. And so that is one of the kind of broader lookouts into deep in this year where international travel could play a role.

Now, let's also talk about Marriott. Let's go to the accommodation space. This one is going to be in focus and why? Well, it's one of the top picks among analysts who are looking across the accommodations in the hotel industry across the Street here. And it has outperformed many of its industry competitors here. But one huge theme to zero in on for Marriott is going to be that rebound in corporate travel that we've been continuing to talk about.

With the number of events that are set to be hosted and bookings that come along with those events, Marriott is seen as one of the outstanding participants or performers within that market here, especially as compared to some of its other peers here as well, even though one of the others also having a good year-to-date. That's Hyatt. So keep close tabs on them. They're up by about 15%.

And lastly, let's go to the high seas here, if you will, where you'll find perhaps Captain Jack Sparrow and a few of his other friends. Let's go to the Caribbean, Caribbean, whatever you're calling it. Royal Caribbean ticker symbol RCL, that is really having a focus on these new fleets. And that could potentially pull forward some bookings here.

And so if you think back to the earnings call that this company just had, they expect to grow capacity by the introduction of the Utopia of the Seas and Silver Ray in the first full year of service of the three incredible ships that joined their fleet during 2023. "The Icon of the Seas, Celebrity Ascent and Silver Nova, the new ships not only elevate their vacation experiences," they said, "and draw new customers to their brands, but they also provide yield tailwinds," they said on the call, "enhancing overall profitability."

And in 2024, they expect yields to grow 5 and 1/4% to 7.25% driven by the performance of their entire fleet. So hoo, that is all that we're going to be tracking at least in these three stocks here, and we'll see how those themes play out for Marriott, Delta, and Royal Caribbean.