Will There Be a Travel-Stock Bear Market? What Skift’s Index Shows

It’s been a wild ride for travel investors this year. After a strong rally to start the year, travel stocks are now on pace to close 2023 in a bear market. The Skift Travel 200, which tracks the stock market performance of the global travel industry, captures the whiplash shareholders have experienced. 

Travel stocks started 2023 strong, up 15% in January. The summer brought continued strength as travel industry profits hit a post-pandemic peak and executives talked a big game. Stock prices rose a further 17% in June and July. Leading the run-up were online travel stocks like, Airbnb and Booking Holdings, and cruise lines, like Royal Caribbean and Carnival Corporation.

Skift Travel 200 Year-to-Date

But July 31, 2023 likely represents travel’s high water mark this year: The ST200 hit 1,030 that day and has been in decline ever since. The index now stands at 846, down 18% from that peak. Airbnb fell -21% over that time frame, Delta Air Lines is down by -33%.

A bear market is defined as a 20% or greater decline, and that’s less than 25 points away – an ST200 level below 824.

How Does Travel Stack Up Against the Broad Market?

Travel has experienced a similar, yet more extreme, version of the broad stock market trends this year. The S&P 500, a gauge of blue-chip U.S. stocks, rallied 20% into the summer, just kissing the edge of a bull market. Travel stocks, over the same time period grew 29%. Since then, the S&P 500 fell by 9% vs. the ST200 decline of 18%.

Skift Travel 200 vs. S&P 500

The takeaway is that travel has proven to be a volatile industry this year. With revenge travel still fresh in investors’ minds, the bulls were out at the start of 2023. But today, with travel’s “new normal” giving way to just “plain old normal,” the bears have come out of hibernation. In finance terms, you would say travel is a higher-beta business. 

Still, let’s not get too far ahead of ourselves: Travel investors made money this year with the ST200 up 6% year-to-date. And that’s a welcome relief from a negative 20% performance in 2022.

How Are Individual Travel Sectors Doing?

Cruise and Tours have been the best performing travel sector so far this year, up 26%. This hardest hit of travel sectors was one of the last to start recovering from the pandemic. But that has also meant it is one of the few still experiencing strong revenge travel demand.

Skift Travel 200 by Sector

This was also the sector with the most irrational exuberance this year, at one point up 70%. That bubble burst as cruises struggle with itinerary disruptions in Maui, Egypt, Israel, and St. Petersburg. The result was a 28% decline in stock prices from the summer-high.

Cruise stocks like Royal Caribbean, Norwegian, and Carnival have a dubious distinction: Both the best performing sector this year and the worst performing sector this quarter.

Ground Transportation and Airlines have also recently underperformed other travel sectors. Hertz stock, for instance is down -51% from summer highs. Travel tech has been the least-bad performing sector since this summer, down 11% from recent highs and up 21% year-to-date. 

The Skift Travel 200 stock index is the first benchmark to measure the $1 trillion-plus market for public travel companies. It tracks travel company stock performance, as well as key metrics, including revenue growth and profit margins.