This year, the travel industry is poised for a comeback, completely erasing its pandemic-fueled losses. According to the World Travel & Tourism Council (WTTC), travel and tourism in the United States should return to pre-pandemic levels in 2022, accounting for nearly $2 trillion of US GDP. High vaccination rates and reduced social distancing protocols and mask mandates are once again motivating global travel. In short, pent-up travel demand is expected to boost the global travel and tourism industry this year.

Summer 2022 is set to be the busiest travel season with restrictions dropping, entry rules easing, mask mandates dropping, and people more informed and cautious in the fight against the pandemic. Data from the European Council indicates that summer bookings have exceeded 2021 levels by 80%.

Popular travel and tourism companies Expedia Group, Inc. (EXPE), InterContinental Hotels Group PLC (IHG) and Target Hospitality Corp. (E) should benefit from favorable winds in the sector in the coming months.

Expedia Group, Inc. (EXPE)

EXPE in Seattle, Washington, is an online travel agency that operates through three segments: Retail; B2B; and Trivago. The company offers travel products and services, a loyalty program, hotel accommodations, advertising and media services under five brands: Brand Expedia, Hotels.com, Vrbo, Expedia Partner Solutions and Egencia.

On February 28, EXPE entered into a partnership with InterContinental Hotels Group PLC (IHG) to maximize its optimized distribution. With this partnership, IHG is expected to leverage EXPE’s enhanced distribution program to consolidate and streamline its wholesale distribution to fuel growth prospects.

EXPE expects about two-thirds of Canadians to plan their trips this year. As pent-up demand fuels travel and tourism in the coming months, demand for EXPE services is expected to rise.

EXPE revenue increased 148% year-over-year to $2.28 billion in the fourth quarter (ended December 31, 2021). Its gross bookings rose 131% from its value a year ago to $17.46 billion. Its net profit increased by 167% compared to the same period last year to reach $276 million, while its EBITDA grew 399.4% year over year to $479 million. The company’s EPS was $1.70, representing a 158.8% year-over-year increase.

For the first fiscal quarter (ended March 31, 2022), EXPE revenue is expected to increase 80.9% year-over-year to $2.25 billion. Its EPS is expected to grow 77% year-over-year in the quarter to be reported. The company has an impressive track record of earnings surprises; it has exceeded consensus EPS estimates in three of the past four quarters.

The stock has gained 16.7% over the past six months to close Friday’s trading session at $198.20.

According to POWR Rankings, EXPE has a B rating for quality and growth. POWR ratings rate stocks on 118 separate factors, each with its own weighting. The title is ranked No. 6 out of 71 titles in the the Internet industry.

Click here to view other EXPE ratings for Value, Sentiment, Momentum and Stability.

Note that EXPE is one of the few stocks hand-picked by our Chief Growth Strategist, Jaimini Desai, currently in the POWR Growth portfolio. Learn more here.

InterContinental Hotels Group PLC (IHG)

IHG is a global hospitality company that owns, manages, leases and franchises hotels. It operates through three segments: The Americas; Europe, Middle East, Asia and Africa (EMEAA); and Greater China. As of December 31, 2021, the company operated 5,991 hotels and 880,327 rooms in approximately 100 countries. IHG is headquartered in Denham, United Kingdom

On March 30, IHG partnered with Sunview Companies to open the first 90-room Atwell Suites property in Miami. This launch should allow IHG to meet growing demand and boost its revenues in the years to come.

Also last month, IHG opened its first Holiday Inn in Bangladesh under the Holiday Inn Dhaka City Center brand. This marks the company’s expansion into the South Asian country. Located in the heart of the city, this property should generate significant income in the years to come.

IHG’s total revenue increased 21.4% year-over-year to $2.91 billion in its fiscal year 2021 (ended December 31, 2022). Its operating profit rose 422.9% from its value a year ago at $494 million, while its net profit improved 201.9% year-over-year to $265 million over the period. The company’s EPS rose 201.2% from its value a year ago at $1.45.

Analysts expect IHG’s EPS and revenue to rise 73.1% and 32.6% year-over-year, respectively, to $2.55 billion and $1.84 billion during the of its 2022 financial year (ending December 31, 2022).

IHG has gained 5.9% in price over the past month.

IHG’s strong fundamentals are reflected in its POWR ratings. The stock has an overall rating of B, which is equivalent to Buy in our POWR rating system. IHG also has an A rating for sentiment and a B rating for growth and quality. The title is ranked #2 out of 22 in the Travel – Hotels/Resorts industry.

Click here to see IHG’s other ratings for value, stability and momentum.

Target Hospitality Corp. (E)

TH is a rental and hospitality services company operating through four segments: Hospitality & Facilities Services-South; Hospitality and Facilities Services – Midwest; Government; and TCPL Keystone. It has a network of rental accommodation units of approximately 15,528 beds in 27 communities offering food and beverage services, housekeeping, security and grounds maintenance. TH is based in The Woodlands, Texas.

TH net revenue increased 58.3% year-over-year to $81.69 million in the fourth quarter ended December 31, 2021. The company’s adjusted EBITDA increased by 113% from its value a year ago at $33.74 million, while its net revenue was $2.80 million, representing a 130% year-over-year improvement. EPS for TH increased 130% from the prior year quarter to $0.03.

Analysts expect TH’s revenue for the fiscal first quarter (ended March 31, 2022) to be $79.77 million, up 75.3% year-over-year. other. The Street expects the company’s EPS to rise 107.1% year-over-year to $0.01 last quarter. It has exceeded consensus EPS estimates in three of the last four quarters, which is impressive.

Over the past year, the stock price has gained 175.6% to close Friday’s trading session at $5.98.

TH’s POWR ratings reflect this promising outlook. The company has an overall rating of B, which translates to Buy in our proprietary rating system. It also has an A rating for growth and sentiment and a B rating for momentum and quality. Also, it is ranked #3 out of 22 stocks in the Travel – Hotels/Resorts industry.

In addition to the POWR Ratings I just highlighted, one can see the value and stability ratings of the TH here.

Note that TH is one of the few stocks hand-picked by our Chief Growth Strategist, Jaimini Desai, currently in the POWR Stocks Under $10 portfolio. Learn more here.

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