The Investment Thread
I know you travel a lot via airlines.
We made 2 trips ( mid nov and early dec ) to Denver. Every single plane ( NO to Vegas, Vegas to Denver, Den to MSY then again NO to Denver, Denver to Hobby and Hobby to MSY ) was full. Not an empty seat to be had.
And that was just my flights on Southwest.
I think once things really start to flow in the direction of endemic, travel is going to go nuts. I had bought shares of LUV a year ago when it was depressed for this very reason.: Once they get past the Government restriction of dividends ( for taking bail out ) they will be flyin. ( ba dum bum ) Dividends.
Side note- not sure if its just Southwest, but i REALLY cant take their new "pre flight" jingle- " Give your seatbelt a tug, your neighbor a hug because this Boein is a GOIN"
I didn't use CLEAR since the start of covid until just before Thanksgiving. Then all the sudden I wasn't sure how people could travel without it. Since November I've been to the following airports, JAN, DFW, LAX, MSP, SLC, JFK, MAD, BOS, LHR, La Palma, LGA, RNO, SMF, ATL, CLT, BNA, GCK, MCI and I'm sure I'm forgetting others. They've been packed, every airline, every flight is packed. Every flight I'm getting voucher offers. Airlines are adding flights back in and all the new plane orders that were cancelled with Boeing and Airbus are going to restrict how many flights can be added. That sounds bad at first for airlines because it means airlines are going to struggle to increase flights to meet demand but that is also going to create a supply shortage on flights which means prices are going to skyrocket. Higher fare prices will increase revenue much faster than adding capacity and increasing prices don't require increasing labor which is still a difficult task.
I don't think any airline is going to be able to outperform any other, they're all just going to be running max capacity for the next couple of years. May be a good opportunity for start up airlines and low budget carriers who will quickly jump on the price fixing bandwagon that AAL, UAL, DAL and LUV have clearly established. The only downside to low budget airlines and startups will be the used plane market is about to get really dry. Also a good environment for Boeing if they can figure out how to get out their own way. Combine quickly increasing profits with inflation and it is a debtor's paradise for AAL. If Boeing can pull their head out of their arse and start their own price fixing with Airbus then they could increase new order pricing by absurd amounts and airlines are going to rush to counter to order regardless.
At least that is my thinking on how this is about to play out.
Hotels have been investing huge amounts into new hotels all over the world. They are trying to increase supply at a very fast rate given the shortage that was experienced last year. The construction methods have gotten very cheap, most of the box hotels only keep 1 person on staff, the new hotels can be checked into using apps, smartphones work as keys and the only cost left is cleaning staff and breakfast crews. Hotels are super profitable right now. Only problem is the increasing supply of rooms coming down combined with air traffic not being able to expand my bring hotel prices back down towards pre-pandemic levels.
Rental Car companies are still experiencing some shortages but they are increasing supply as fast as car makers can spit out cars. They are paying a premium for cars right now and car rentals are very dependent on air travel. Like hotels, I think they may be struggle to see profits increase even if they are increasing revenue.
Cruise Companies are the play I like the least. A combination of people just not wanting to cruise due to it being a petri dish for not just covid but everything else is going to take a while to overcome. Increasing fuel costs is also a big challenge. Finally, people are becoming more environmentally aware and cruising is by far the least efficient way to travel. They lost a lot of customers to covid deaths in the elderly population and millenials are more likely to be anti-cruise than customers. I do like the luxury cruise options a lot more. The companies running the smaller and mid size luxury ships with huge premiums may have better luck but even those are a hard pass for me.