5 Travel Stocks to Buy in a Tricky Environment

The COVID-19 Delta variant has thrown a wrench into 2021's travel recovery. But these travel stocks still offer plenty of promise.

A man in a mask looks at airline destinations
(Image credit: Getty Images)

The open road is calling, but the Delta variant of COVID-19 has something to say, too. And that's putting travel stocks in a sticky wicket.

Americans clearly want to travel. Hotel research group STR notes that by early August, average hotel occupancy had bounced back to roughly 64% (opens in new tab) – just about 9% below pre-pandemic figures, and a sharp improvement from the COVID lows. TSA data also shows that airline travel has remained swift, hovering just below 2 million passengers a day for much of the summer.

However, the highly contagious Delta variant has prevented the U.S. from bursting into a full-blown travel recovery. A Harris poll conducted early last month said that 72% of Americans were checking on the COVID situations at their planned destinations before going. Half said if they were going to somewhere suffering from a boom in COVID cases, they would either postpone or cancel their plans.

This has investors walking a thin line as it pertains to travel stocks. For the most part, the "easy money" has already been made in most of the industry's shares, as the simple act of reopening sent travel plays surging over the past year. Now, demand is swift, but the Delta variant has injected some uncertainty to the situation, all but guaranteeing we won't return to pre-pandemic numbers in the short term.

But that doesn't mean there aren't profits to be made.

Read on as we explore five travel stocks to buy. Each of these picks looks attractive for their own reasons – relatively cheap valuations compared to peers, serving a particularly potent niche, a stellar balance sheet that should allow it to navigate continued difficulty better than the competition, and more.

Data is as of Sept. 6.

Contributing Writer, Kiplinger.com