Nasdaq+ Exclusive

Wanderlust noun /ˈwɑːn.dɚ.lʌst/: the wish to travel far away and to many different places.

That definition, given by the online Cambridge dictionary, pretty well sums up humankind’s ceaseless itch to leave the nest and explore. Of course, COVID severely thwarted our drive to get out there.

That was then. Now, it appears there’s no stopping us. As Thanksgiving approaches and the year ends, estimates are that Americans will have forked out $9.5 trillion on travel and tourism in 2023. Not quite what the spending level was before the pandemic, but a healthy recovery for the industry all the same, which shed 62 million jobs at the peak of the scourge.

Flights and restful nights

From an investment standpoint, this augurs well for companies in the business of moving us quickly from here to there. Consider: Profit at Delta Air Lines’ (DAL) jumped almost 60 percent in Q3 2023. Despite mounting consumer fury over cancelled flights, lost luggage and rude fellow passengers, airline industry net profits will likely reach $9.8 billion in 2023. That’s more than double the $4.7 billion predicted last December.

Firms offering accommodations for travelers have seen an upsurge in business, too, with revenue in the hotel market alone expected to grow to $1.21 trillion by year’s end.

Figures like these give a rush of adrenaline to shareholders who’ve invested in steady performers like Ryanair Holdings (RYAAY) or Marriott International, Inc. (MAR). But keep your peripheral vision sharp on other players in the industry. Lots of firms beyond airlines and hotels are also cashing in on all this renewed wanderlust. Here are few others to watch:

The industry’s tech backbone

Today’s consumers demand hassle-free, app-driven travel arrangements—reservation networks, flight information, airport and hotel check-ins—all made easily accessible on their phones. Enterprises like Sabre Corporation (SABR), which has earned a solid “buy” from at least one analyst, provide the software spine behind these systems.

Like many travel-related ventures, Sabre had a rough go of it during the pandemic, with revenue plummeting dramatically in 2020. But it has just inked a new deal with Air India that should give it a much-needed boost.

Peer advice sites

Influencers have a major impact on travelers’ behavior, which has put Yelp (YELP), widely trusted for its authenticity, in a strong position. The evidence? Its fiscal-year revenue could come in as high as $1.33 billion—a 12 percent increase year over year.

Peace-of-mind providers

Travelers skew old—on average they’re over 40—because they’re the folks likely to have the most disposable income. They also have bigger health concerns than their young, footloose counterparts, so they’re fueling the market for out-of-country medical coverage.

One company with an insurance arm and unbeatable creds? Berkshire Hathaway (BRK.A). The estimated annual revenue of its travel protection division per year is $8.6 million. That’s a pittance by some standards—but think of the cachet you get from holding stock in a Warren Buffett endeavor.

Last-minute gift purveyors

The big name in duty free is Lagardere SA (MMB.PA), a Paris-based firm which is also a major media company, producing titles like Paris Match. Under its Lagardere Travel Retail moniker, it operates nearly 5,000 stores in airports, train stations and metros around the world. Its Q3 revenue in 2023 increased by a healthy 12%, owing largely to strong growth in its retail sector.

Rolling thunder options

We’ll travel by air if we must, but there’s a real market for extravagance when time and money aren’t factors—and that’s reflected in the stock prices of enterprises ready to indulge us. While cruise ship travel is rebounding, there are other options.

One example: Canadian National Railway (CNI) operates a range of super-high-end cross-country trips—10K-plus for the most expensive—through its Via Rail passenger line. It must be doing something right, since the rail company’s stock has been on a dramatically sharp upward trajectory since the beginning of the century.

And there’s always the final frontier

If the thought of space travel terrifies you, investing in a company that offers above-the-atmosphere tourism shouldn’t, given the stock outlook for in Virgin Galactic (SPCE). At its current pace, the company—the first to offer commercial spaceflight—is on track to see a year-over-year increase in earnings on higher revenues when it reports results for the quarter this week.

Apparently, enough intrepid souls with deep pockets are prepared to go to infinity and beyond. But for the rest of us, a backpack and an open mind are usually enough.