Travel Monthly Report | May

06 May 2022

Travel ETF Monthly Report: Key Takeaways

Airlines, hotels, and cruise lines have been hit hard by COVID-19.  In 2021, global airline revenues were only 56% of their 2019 levels [1], while the world’s hotels took in 68% as much revenues as they did in 2019. [2] The cruise industry fared the worst, with 2021 revenues 76% below 2019. [3]

Some smaller operators have gone under, but most larger companies have managed to survive through a combination of cost-cutting, borrowing and government financial assistance. Large cruise operators have relied upon sizeable cash cushions to sustain them after their business dried up almost overnight. [4]

The post-pandemic recovery of the airline, cruise line and hotel sectors will be gradual, with only the cruise line sector expected to regain and surpass its 2019 level by 2024.[5] The airline and hotel industries are estimated to recover to within 10% of their 2019 revenue levels by 2024.[6] As the travel market recovers, the new, leaner operating models that many companies have implemented during the pandemic should pave the way to increased profitability in 2022 and beyond. 


Macro Outlook

In the short run, the demand for travel services should be driven by the overall downwards trend in COVID-19 cases, the resulting relaxation of government-imposed travel restrictions, the pent-up demand for private trips not taken during the pandemic, the pandemic-related growth of disposable income and savings, the recovery of business travel, and overall macroeconomic conditions.[7] These drivers have been factored into the revenue projections summarized above.

Another development that could affect the travel industry is higher-then-anticipated inflation, especially in the United States and many emerging market and developing economies. In the U.S., hotel rates were up 25.1% in March 2022 compared to March 2021 and 13.4% compared to March 2020, the last full month before the WHO declared COVID-19 a global health emergency.[8] Airfares were up 23.5% in March 2022 vs. March 2021 although they were still down 8.1% vs. Feb. 2020.[9] As the direct cost of travel increases and travellers’ budgets are constrained by general increases in the cost of living, travel industry revenues could be significantly affected.  In one poll taken in late March 2022, 40% of US respondents said they would cancel a vacation or trip if consumer prices continue to rise. [10]

A wild-card in the travel and tourism outlook is the February 2022 Russian invasion of Ukraine, the ensuing war, and the punishing sanctions that many countries have placed on Russia.  Apart from the war’s impact on energy prices and inflation, the travel impact of the war is likely to be felt most directly on inbound travel to the two combatant countries as well as outbound travel by their residents.[11] As the war continues and possibly intensifies, its travel impacts may ripple outwards. Bookings to Baltic destinations have reportedly slowed, while one survey found that the war in Ukraine is twice as likely to impact Americans' plans to visit Europe than Covid-19.[12] Costs on the ground may also go up in countries heavily reliant on Russian oil and gas imports, possibly causing some visitors to change their travel plans. [13]


 Travel ETF Performance Table (As of 30.04.2022)








Airlines, Hotels and Cruise Lines UCITS ETF - Acc







Solactive Airlines, Hotels, Cruise Lines Index







Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 31/03/2022. Performance before inception is based on back tested data. Back testing is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such strategy would have been. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in this product. 


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