Travel Monthly Report | September

22 September 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 had large 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 2023.[5] The U.S. hotel industry is expected to recover by 2024, while the hotel recovery in other regions may take longer.[6] The airline industry is not expected to recover until 2025.[7] However, this recovery will take longer in some regions.
  • 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 the future.
  • The travel industry still faces significant challenge's on the way to recovery, as described below under the Macro Outlook. These challenges have led some observers to declare “The Golden Age of Travel is over”.[8] However, it should be remembered that over the long term, travel and tourism stocks have significantly outperformed many other investments. For example, in the ten full years before the pandemic (Dec. 29. 2009-Dec. 31, 2019), the DJUSTT increased 529%, compared with a 286% increase in the S&P 500. [9]

Please note that all performance figures are showing net data. Past performance is no guarantee of future performance.


Macro Outlook

In the short run, the demand for travel services should be driven in large part 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.[10] These drivers have been factored into the revenue outlook summarized above.

Other risk factors include inflation in several major travel markets, particularly the United States. U.S. inflation recently hit a 40-year high of 9.1% before declining slightly to -8.5% in July 2022.[10] While the U.S. Travel Price Index (TPI) also declined slightly in July, the TPI increased considerably faster (i.e., 11.5%) than the overall consumer price index (CPI) for the entire year between July 2022 and 2021. Hotel rates were up 1.3% in July 2022 compared to July 2021. Airfares were up 27.7% over the same period. The price of motor fuel increased 44.5% between July 2022 and July 2021.[11] Inflation increases direct travel costs while shrinking travelers’ budgets, causing them to take shorter trips, stay closer to home, drive rather than fly, or not travel at all, any of which can negatively affect travel and tourism industry revenues.

However, we are beginning to see signs that the worst may be past. For example, in the US, the travel booking platform Hopper is forecasting round-trip domestic airfare will drop by an estimated -38% from their peak summer levels in September and October.[12] Inflation in hotel rates, which are projected to increase by 18.5% for all of 2022, is expected to slow to 11.5% in 2023.[13] U.S. gasoline prices were up 45% YOY in July 2022, but decreased by -11.8% in July and have continued their decline since then. [14]

The European market presents a similar picture. In the Euro zone, inflation hit 8.9% in July 2022,[15] while in the U.K. prices rose by 10.1%.[16] In a Statista survey conducted in June 2022, 30% of Europeans reported that the increase in price levels significantly affected their desire to travel. [17]

Even with the fare increases, the airline industry has been having trouble keeping up with demand, causing a surge in flight delays and cancellations. In the U.S., the cancellation rate for the first half of 2022 was 2.8%, compared with 1.1% - 1.9% between 2011 and 2019.[18] Europe had more than double the cancellations of U.S. carriers between April and June 2022.[19] These problems, if they continue, could cause long-term changes in the traveling public’s preference for air travel vs. trains and personal cars, to the airlines’ detriment. [20]

The long-anticipated recovery of business travel is taking place slowly, but it remains at less than half of pre-pandemic spend. Increased travel prices, combined with the demonstrated ability of technology to replace many in-person meetings, are acting as a drag on corporate travel, even as COVID-related restrictions decline, and more employees return to the office. [21] Business travel is not expected to recover fully until at least 2026. [22]

The Russia-Ukraine war has had a significant impact on travel and tourism, but the impact has been blunted somewhat by the prolonged stalemate in the war. The Geopolitical Risk (GPR) index is a news-based measure of adverse geopolitical events that generally foreshadows higher disaster probability and larger downside risks. The GPR spiked spiked after Russia invaded Ukraine, but after several months of stalemate have subsided closer to pre-war levels.[23] This suggests that businesses and consumers are “getting used to” the war and going on with their lives.


 Travel ETF Performance Table (As of 31.08.2022)








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 31/08/2022. 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. 


Learn more about our  Travel ETF.

Sign Up to Insights

Tell us how we can help