Airbnb (ABNB)
You might think that the pandemic would have annihilated a vacation rental company because so many people cut back on travel, but Airbnb’s stock managed to gain about 13 per cent in 2021.
There are several reasons why Airbnb remains attractive, even with omicron uncertainty hanging in the air.
The Airbnb app remains a first option for many travelers who abandoned traditional hotels. If those travelers hope to avoid crowds, staying in an Airbnb provides more social distancing than a hotel. And once the pandemic has passed and rental demand in city centers returns, there will be no shortage of real estate investors fashioning apartments and condos into Airbnb rentals.
The company just wrapped up the best quarter in its brief history. The third quarter saw Airbnb rake in more than US$2.2 billion in revenue, a 67 per cent year-over-year increase. Net profits for the quarter were US$834 million.
Carnival Corp. (CCL)
Carnival, America’s largest cruise operator, has not fared as well as Airbnb. Since the start of January 2020, the cruise ship operator has seen its share price sink by about 50 per cent.
That’ll happen when numerous COVID outbreaks on boats have the world thinking your product is a floating germ lab.
But the global cruise industry is alive and kicking. In December, 68 brands are set to operate 239 cruise ships, according to Cruise Industry News, which predicts major companies will be back to operating a large part of their fleets by early 2022. The rebound in demand has analysts forecasting a return to profitability for Carnival next year.
That’ll be welcome news because 2021 has been awful. Carnival posted a net loss of US$2 billion in the third quarter alone. But the company also had US$7.8 billion in liquidity at the end of Q3, which the company says will be enough to return it to full operations.
Booking Holdings (BKNG)
Booking Holdings is a lot more than just Booking.com. The company owns several popular travel fare aggregators, including Priceline, Agoda, Kayak, Cheapflights and even restaurant reservation platform OpenTable.
In 2019, the last full year before the pandemic, consumers booked 845 million room nights, 77 million rental car days and 7 million airplane tickets through websites owned by Booking Holdings.
With little opportunity for competitors to swoop in and absorb its market share in the last two years, the company stands to continue as a dominant player in the travel booking space.
Booking is already reaping the benefits of rising demand from travelers. It brought in almost US$4.7 billion in revenue in the third quarter, a 77 per cent increase over the same period last year.
Over the past year, Booking shares are up about 8 per cent.
There’s more to investing than stocks
Nothing against JPMorgan, but no one can truly predict what 2022 will mean for the stock market. A number of prominent investors have said it’s due for a historical correction.
If you want to invest in something that avoids the queasy up-and-down of the stock market, it might be time to take a look at an overlooked asset: fine art.
Contemporary artwork has outperformed the S&P 500 by a commanding 174 per cent over the past 25 years, according to the Citi Global Art Market chart.
And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.
On a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12.
Investing in art by the likes of Banksy and Andy Warhol used to be an option only for the ultrarich. But with a new investing platform, you can invest in iconic artworks, too, just like Jeff Bezos and Bill Gates do.
