Tourism companies are having sweet moments at the door of a record season. The reservations suggest that these companies will do more than ‘August’ this summer before holiday demand snowballs. In the case of Spain, an unprecedented summer season is expected to replace 2019’s pre-pandemic record. According to the data of the World Tourism Organization, 2019 values have already exceeded 1% despite the very low inflation. this year will return to one of the most expensive seasons in history. And this has a reflection on the stock market. The companies that gained the most value in Ibex this year so far have been tourism companies.. Amadeus is the value of the selector who advanced the most and recorded a 42% increase in their titles. Inditex is in second place with a growth of 38%, followed by the rest of the group in the industry: 34% up from Melià with a recovery of up to 37.6% with those listed in the General index 28% through the IAG and even the revalued Aena Concerningly, their performance has also been remarkable. In these months, NH grew by 50%, while the Edreams travel search engine grew by almost 65%. Despite the good numbers, experts warn that groups are still unable to recover their incomes in real terms (if the effects of inflation are dampened) and that consumers prefer shorter stays.
As an example of what summer can bring on the subject of reserves, Easter can be taken as a starting point. Spain received 18.5% more tourists in April than in 2022, receiving up to 7.2 million tourists. International visitors spent 8,480 million tourists, 22.7% more than in 2022 and 20.1% more than in 2019.. “After a few difficult years, we are seeing a very positive recovery in the markets in the tourism sector. Summer prospects predict strong demand and remove any signs of recession in these companies,” said Diego Morín, an analyst at investment house IG. Industry, Trade and Tourism Minister Héctor Gómez, during his visit to Santacruz de Tenerife this Friday, denied that inflation has had a negative impact on the development of tourism activity and suggested that the forecasts for the coming period are “extraordinary”.
All forecasts indicate that this growth will be reproduced during the strongest months of the summer season. It will do so despite an economy still affected by the pandemic and world inflation that continues to make everything more expensive, including flights, accommodation and tourism services. “Demand responds despite rising prices”Also noticing that prices are now 20% higher than in 2019, Barceló CEO Raúl González assured at an informative breakfast this Wednesday. “New generations are choosing to spend on experiences and cut back on other expenses. This is a new trend that is benefiting the industry,” says Virginia Pérez, director of investment at Tressis.
The expected good weather for this season, which may last until September, the control of energy prices and the opening of Asian markets after China eased restrictions are headwinds blowing for the tourism sector and reinforcing its rise in the sector. good prospects in the stock market. “The reserve level exceeded expectations. The sector was able to overcome the bad expectations caused by inflation and macroeconomic turmoil.“, says Joaquín Robles, an analyst at XTB brokerage firm. But it should be borne in mind that these groups were the ones that suffered the most during the outbreak due to the quarantines. Now they will be collecting to face the debts they incurred during the worst covid era,” Robles warns.
Tourism GDP below 2019
Virginia Pérez of Tressis, discounting the increase in prices in real terms, tourism GDP still under 2019. “These companies have suffered more from covid than ever before, they still have more debt than the pandemic, and it should be noted that airlines and hotels are very capital-intensive companies. Financing, supply and labor prices are rising. These are not. They will be able to continue to pass on all the increase in costs to the customer and save a margin on margins. This analyst, who says, “There will be a decrease,” suggests investing in these and preferring these values in this good period of the industry. More connected with technology like Amadeus, Airbnb or Booking.
Related news
The IAG example is paradigmatic. “They lost up to 10,000 million and had to borrow money to get through the pandemic”says Robles. According to the final report, the airline closed the 2022 fiscal year with a net debt of 10,385 million euros. In addition, airlines are under pressure from high oil prices. The company’s shares are trading at 1.8 euros but are struggling to reach a valuation of 2 euros, and the company posted an operating profit thanks to strong demand across all airlines.
Amadeus, on the other hand, saw more than 200 million benefits in its first quarter results. This is up to 200% more than a year ago. On the other hand, Melià recorded a loss of € 500,000 in the first quarter, but very much less than the previous year, when losses of up to € 59.3 million were recorded. Another big asset related to mountain goat tourism, Aena posted a net profit of 133 million, surpassing a loss of 53 million a year ago..