1 – 5 Nov | Special Edition on the Tourism Industry

The tourism industry is still battling with health restrictions all over the world, and some countries are still closed to tourists. How will this impact the profits of major travel companies? Let’s take a closer look.

Optimism for the travel industry?

After a disastrous year in 2020, the tourism industry is slowly getting back on track. Some borders have reopened since the summer, and Europe has introduced a health pass that standardizes travel across the Union. On top of that, on November 8th, the US will once again grant access to vaccinated tourists – an important step that should allow travel companies to rebound.

Additionally, there’s been a shift in lifestyle changes which could benefit the travel sector in the future. For example, the increase of remote working could help companies like Airbnb and TripAdvisor cater for this specific demand. We explained more about this phenomenon in this article.

Profitability of the entire travel sector is still 35% below its pre-pandemic level, so growth prospects are still moderate. Also, the controversial EU-Qatar free-trade agreement poses a considerable threat to the eurozone airline industry. The agreement would allow Qatar Airways to have flight rights throughout the EU from 2024, adding more competition.

Lufthansa boost in ticket sales

German airline Lufthansa, one of the largest in Europe, will release its third-quarter figures on Wednesday, November 3rd. We’re expecting a significant boost in ticket sales, estimated to increase by €5.66 billion. The share price remains relatively low compared to 2019.

Recently, Lufthansa announced that it would raise €2.1 billion to pay off some of the state bailout it received from the German government during the pandemic. The company’s CEO Carsten Spohr also remains optimistic about the future of Lufthansa. Business travel is expected to rebound strongly after a number of poor quarters. This should be felt in the upcoming earnings report.

Airbnb could break a record

On Thursday, November 4th, Airbnb will announce its quarterly results. The company could see historic revenue thanks to relaxed restrictions and the rise of digital nomads. Analysts expect the company’s profit and revenue to be the highest on record thanks to a catchup of cancelled bookings in 2020. The share price is now up 15% year-to-date. Last quarter, earnings-per-share was up 88% and revenue was up 299%.

Spotlight on Booking and Expedia

Booking will publish its quarterly figures on Wednesday, November 3rd with Expedia following the next day. 

Both companies have seen their stock price rise in recent weeks, especially thanks to the loosening of travel restrictions to the United States. So the numbers could surprise investors. Booking forecasts earnings per share of $33 (three times higher than last year). Analysts are also optimistic about Expedia, with most recommending ‘buy’ or ‘hold’ ratings on the stock.

Economic and earnings calendar

Monday – Figures on auto sales in the United States (October). Quarterly figures from PG&E.

Tuesday – Manufacturing PMI index in France, Italy, Spain, Germany and the euro zone. Quarterly figures from Pfizer, Fresenius, HelloFresh, Activision Blizzard, Under Armour, Unity.

Wednesday – Budget balance in France. Unemployment rate in Ireland, Spain and the euro zone. Fed decision on inflation rates. Quarterly figures from Lufthansa, Booking, Eiffage, NRJ Group, BMW, Zalando, Qualcomm, Etsy

Thursday – Inflation rate in the Netherlands (October). Services PMI index in Spain, Italy, Germany, France and the euro zone. Trade balance in the United States. Quarterly figures from Airbnb, Expedia, Amundi, ArcelorMittal, Kellogg’s, GoPro, Commerzbank, Deutsche Post.

Friday – Industrial production in Germany, France and Spain (September). Unemployment rate in the United States. Quarterly figures from Athenex, Ventas.

We’ll be back next week with another edition of the BUX Breakdown. In the meantime, have a great week on the markets!

The BUX Breakdown was written by Clémentine Pougnet.

All views, opinions, and analyses in this article should not be read as personal investment advice and individual investors should make their own decisions or seek independent advice. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.