The wall of worry continues to propel stocks higher as this long plodding economic expansion is assumed to be in the later innings. With low interest rates and slow growth, many are still waiting for the the full throated recovery to manifest.  However, for the luxury and leisure world the good times just keep rolling. Cruise ships, air travel, luxury car sales, hotels …you name it and it’s delivering consistent sales expansion over the past 6 years. With aging boomers and an economic cycle with room to run there could be more to come from the big spenders and silver haired crowd. The global baby boom is transforming into the senior surge who seek more frequent and experiential vacations. As strong as the benchmark S&P 500 Index has been, the luxury sector has outperformed most stocks.

 

 

Travel isn’t just for the senior circuit. In a study looking at the priorities of Millennials, travel came out as a higher priority than buying a home or car, or even paying off debt. In China, travel was the highest priority by a wide margin. Floating hotels continue to benefit from appreciating retirement wealth from the rapidly aging 1st World countries. Carnival Cruise Lines stock is up 32% since Trump was elected and 340% since the 2008 bottom.

 

 

Travel priority trends and the explosive Asian growth keeps airplane orders soaring with long term up trends in passenger air travel. Since Trump was elected Boeing is up 45% and best of breed Southwest Air is up 50%. Leisure air travel growth is outpacing business travel trends and with aging boomers flooding into retirement mode. This supply will keep feeding air travel capacity for many years to come.

 

U.S. hotels led by resorts and casinos are achieving all-time record occupancy levels and near record profit margins. The upper-priced properties led the U.S. lodging industry out of the Great Recession and have continued to achieve occupancy levels in excess of 70%. Leader Wynn Resorts stock has gained 57% since Trump was elected.

Print Friendly, PDF & Email