inflation showed signs of cooling in July, with prices up 8.5% from a year ago, less than expected, and down 0.6% from June’s peak. As a result, travel demand is expected to increase ahead of the Labor Day weekend.
“Prices will probably drop a bit between now and mid-October. You you will want to book your vacation trip in this second week of October,” said Haley Berg, chief economist at Hopper.
Additionally, according to Tripadvisor’s Fall Index survey, about 37% of Americans they still prefer to travel as planned this fall, regardless of inflation. In addition, revenue is expected in the travel and tourism industry grow at a CAGR of 8.5% from 2022 to 2026.
Given the backdrop, it might be wise to add fundamentally sound travel stock Bluegreen Vacations Holding Corporation (BVH), Playa Hotels & Resorts NV (BEACH), and Target Hospitality Corp. (TH) in your portfolio as inflation cools.
Bluegreen Vacations Holding Corporation (BVH)
BVH operates as a vacation ownership company. It markets and sells vacation ownership interests (VOIs) and manages resorts in urban and leisure destinations. The company’s network includes 45 resort clubs, 23 partner clubs and 128 Bass Pro Shops and Cabela’s.
On August 3, 2022, Alan B. Levan, Chairman and CEO of BVH, said: “Overall, demand for vacations from Bluegreen Vacation Club owners has been strong and we believe that our core strategy of ‘mainly offering a drive-to network of tourist centers will continue to serve as a growth engine’.
BVH’s total revenue was $235.60 million for the second quarter ended June 30, 2022, up 21.8% from a year earlier. Its free cash flow rose 35.6% year over year to $61.05 million. In addition, the company’s VOI sales increased 57.1% year-over-year to $144.26 million.
Analysts expect BVH’s revenue to rise 16.5% year-over-year to $882.17 million in the current year. Its EPS is estimated to rise 32.3% YoY to $3.69 in 2022. Over the past year, the stock has gained 15.8% to close the last trading session at 23.90 dollars
BVH POWR ratings reflects this promising perspective. The company has an overall rating of A, which translates to a strong buy in our proprietary rating system. The POWR ratings evaluate stocks by 118 different factors, each with its own weighting.
BVH has an A in Value and Quality and a B in Feeling. Within the B classification Travel – Hotels/Resorts industry, ranks first among 21 stocks. Click here to see additional POWR Ratings for Momentum, Growth and Stability for BVH.
Playa Hotels & Resorts NV (BEACH)
PLYA and its subsidiaries own, develop and operate resorts in prime beachfront locations in Mexico and the Caribbean. The company manages a portfolio of 22 resorts with 8,366 rooms located in Mexico, Jamaica and the Dominican Republic.
On August 2, 2022, PLYA signed an agreement to take over the management of the renowned Seadust Cancun Family Resort in Mexico. This collaboration highlights PLYA’s position as a major player in hotel management.
PLYA’s total revenue was $221.27 million for the second quarter ended June 30, 2022, up 71.8% year over year. Its adjusted EBITDA increased 169.3% year-over-year to $61.70 million. Additionally, the company’s net income was $30.50 million, compared to a net loss of $7.80 million in the year-ago period.
The Street expects PLYA’s revenue to rise 56.5% year-over-year to $836.60 million in the current year. Its EPS is estimated to grow 200% YoY to $0.48 in 2022. Over the past month, the stock has gained 13.3% to close the last trading session at $7.33.
PLYA has an overall rating of B, which is equivalent to a buy in our POWR rating system. It has an A for Sentiment and a B for Quality, Growth and Value. It ranks second in the same industry. In addition to the above, we have also rated PLYA for Momentum and Stability. Get all PLYA scores here.
Target Hospitality Corp. (TH)
TH operates as a specialty rental and hospitality services company in North America. The company operates through four segments: Hospitality Services and Facilities – South; Hospitality Services and Facilities – Midwest; Government; and TCPL Keystone.
TH’s total revenue was $109.65 million for the second quarter ended June 30, 2022, up 46.2% from a year earlier. Its net income was $22.85 million, compared with a loss of $912,000 in the year-ago period. The company is tight EBITDA reached $56.12 million, up 75.7% from the previous year.
TH’s revenue is expected to increase 75% YoY to $509.80M in the current year, while its EPS is estimated to increase 2,840% YoY to $1.37. Over the past year, the stock has gained 329.1% to close the last trading session at $14.16.
TH has an overall B rating, equivalent to a buy in our POWR rating system. It has a B grade in growth, sentiment and quality. It ranks third in the same industry. We’ve also ranked TH by Momentum, Stability and Value. Get all TH scores here.
BVH stock was trading at $23.37 per share mid-day on Friday, down $0.53 or -2.22%. Year to date, BVH has declined -32.63%, compared to a -10.48% increase in the benchmark S&P 500 over the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master’s degree in economics, he helps investors make informed investment decisions through his insightful commentary. Month…