News that US officials have recommended a break on the use of the Johnson & Johnson Covid vaccine could have a negative effect on the tourism industry and how willing consumers are to make a trip this summer, some investors fear.
Travel exchanges have performed well – the JETS ETF, for example, has fallen 7% from March highs, while online travel agency Booking is down just 3%.
BTIG digital services analyst Jake Fuller, who covers stocks such as Booking and Airbnb, does not see a long-term impact from the latest hurdles in launching the vaccine.
“Any delay in vaccinations will certainly push a recovery in travel, but importantly, it will not derail the inevitable,” Fuller told CNBC’s Trading Nation on Tuesday.
Fuller offers three reasons why he remains optimistic in the tourism industry. The first, he says, is how consumers behaved last year during closing times.
“I saw her last summer, you’ll see her again this year. People want to go out, people will take a vacation,” he said.
His second point is that the industry will adapt. Instead of resorts and airports, people will give priority to rental housing and road travel.
Eventually, any slowdown this year will be offset in the coming years, he says.
“Whether the distribution of the vaccine is delayed or not in the short term, it doesn’t really derail what we expect in the 2022 and 2023 calendars. Bottom line, we’re looking for a fairly quick full recovery, a lot of retained demand,” Fuller said.
However, the industry is not without risks. In addition to any recurrence in Covid cases, Fuller says online travel bookings can give way to the natural business cycle.
“It’s a mature business. So, once we go through the recovery phase, I think you look at the growth of online travel, which is much more like the basic tourism industry, say 3, 4, 5, 6%. % to 15% growth in the industry, which probably keeps the valuation cap ahead, ”he said.
BTIG has a neutral rating on Booking, TripAdvisor and Airbnb. However, the company has a purchase rating and a target price of $ 180 on Expedia, based on upward market share projections. Expedia shares closed Tuesday at $ 51.69 and rose 29% this year.