As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the travel and vacation providers industry, including American Airlines (NASDAQ:AAL) and its peers.
Airlines, hotels, resorts, and cruise line companies often sell experiences rather than tangible products, and in the last decade-plus, consumers have slowly shifted from buying "things" (wasteful) to buying "experiences" (memorable). In addition, the internet has introduced new ways of approaching leisure and lodging such as booking homes and longer-term accommodations. Traditional airlines, hotel, resorts, and cruise line companies must innovate to stay relevant in a market rife with innovation.
The 18 travel and vacation providers stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.1% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 7.8% on average since the latest earnings results.
American Airlines (NASDAQ:AAL)
One of the ‘Big Four’ airlines in the US, American Airlines (NASDAQ:AAL) is a major global air carrier that serves both business and leisure travelers through its domestic and international flights.
American Airlines reported revenues of $14.39 billion, flat year on year. This print exceeded analysts’ expectations by 0.6%. Despite the top-line beat, it was still a slower quarter for the company with full-year EPS guidance missing analysts’ expectations significantly and EPS guidance for next quarter missing analysts’ expectations.
“American delivered record revenue in an evolving demand environment in the second quarter thanks to the hard work and dedication of our team,” said American’s CEO Robert Isom.
Interestingly, the stock is up 8.2% since reporting and currently trades at $13.74.
Read our full report on American Airlines here, it’s free.
Best Q2: Pursuit (NYSE:PRSU)
With attractions ranging from glacier tours in the Canadian Rockies to an oceanfront geothermal lagoon in Iceland, Pursuit Attractions and Hospitality (NYSE:PRSU) operates iconic travel experiences, experiential marketing services, and exhibition management across North America and Europe.
Pursuit reported revenues of $116.7 million, down 69.2% year on year, outperforming analysts’ expectations by 6.9%. The business had a stunning quarter with a beat of analysts’ EPS estimates and full-year EBITDA guidance exceeding analysts’ expectations.
The market seems happy with the results as the stock is up 24.2% since reporting. It currently trades at $37.30.
Is now the time to buy Pursuit? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Hilton Grand Vacations (NYSE:HGV)
Spun off from Hilton Worldwide in 2017, Hilton Grand Vacations (NYSE:HGV) is a global timeshare company that provides travel experiences for its customers through its timeshare resorts and club membership programs.
Hilton Grand Vacations reported revenues of $1.27 billion, up 2.5% year on year, falling short of analysts’ expectations by 8.1%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EPS estimates.
Hilton Grand Vacations delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 6.4% since the results and currently trades at $47.52.
Read our full analysis of Hilton Grand Vacations’s results here.
Choice Hotels (NYSE:CHH)
With almost 100% of its properties under franchise agreements, Choice Hotels (NYSE:CHH) is a hotel franchisor known for its diverse brand portfolio including Comfort Inn, Quality Inn, and Clarion.
Choice Hotels reported revenues of $426.4 million, down 2% year on year. This result was in line with analysts’ expectations. Taking a step back, it was a mixed quarter as it also recorded full-year EBITDA guidance slightly topping analysts’ expectations but a miss of analysts’ adjusted operating income estimates.
The stock is down 4.4% since reporting and currently trades at $119.58.
Read our full, actionable report on Choice Hotels here, it’s free.
Hilton (NYSE:HLT)
Founded in 1919, Hilton Worldwide (NYSE:HLT) is a global hospitality company with a portfolio of hotel brands.
Hilton reported revenues of $3.14 billion, up 6.3% year on year. This number topped analysts’ expectations by 1.4%. Zooming out, it was a satisfactory quarter as it also produced an impressive beat of analysts’ adjusted operating income estimates but EBITDA guidance for next quarter missing analysts’ expectations.
The stock is flat since reporting and currently trades at $276.06.
Read our full, actionable report on Hilton here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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