Top travel industry shares to invest in during the bustling summer vacation season
Britons prepare for summer holidays as warmer weather arrives, boosting demand for travel after two years of pandemic-induced restrictions. Despite the promise of shorter passport control queues due to the UK's Brexit trade deal with the EU, soaring airfare prices have raised concerns for holidaymakers.
According to the latest inflation data, airfares have increased by 27.5% annually in April, while cruise fares are also on the rise. This trend comes as services inflation reached 5.4% in the same period.
However, investors may see an opportunity in the travel sector's price surge. The tourism industry has struggled for years due to the pandemic and geopolitical tensions, but the upcoming summer holiday period is expected to bring a much-needed boost in demand.UK budget airline easyJet, known for its affordable flights, especially to Europe, is one company set to benefit from the expected rise in travel.
Despite posting a loss in its first-half results for the six months to 2025, the company reported that its third quarter is 80% booked, with the fourth quarter at 42%, both ahead of this time last year. Additionally, easyJet's holidays business generated a £44 million profit, up from £31 million, thanks in part to a projected 25% increase in customers this year. Forward bookings for holidays in the second half are 77% sold, according to the company.
Adam Vettese, market analyst at eToro, commented on easyJet's prospects, stating that diversifying revenue streams "should help give earnings more stability, although geopolitical tensions or fuel price volatility remain factors that could potentially come into play."
Another travel company poised for growth is Tui, the airline and holiday brand. Tui reported a pipeline of 8.6 million bookings for Summer 2025, indicating robust demand for package holidays and flights. Its Q2 2025 airline revenue increased 1% to €3 billion, while hotel and resort revenue rose 3.2%. However, cruise sales fell 1.7%, primarily due to refocused itineraries. Tui anticipates revenues across its airline, holidays, and cruise brands to grow between 5% and 10% over the year, reaching €23 billion.
Whitbread, the owner of budget hotel chain Premier Inn, has seen an increase in demand for staycations as consumers seek more affordable options. Whitbread's full-year results indicate that total accommodation sales were down 1% in the UK but outperformed the market. Room sales in Germany, a key growth area for the brand, were up 23%. Group revenue fell 1%, while pre-tax profits dropped 14%. Despite these declines, Whitbread remains optimistic and aims to deliver incremental profit of at least £300 million by 2030.
WH Smith offers a different avenue for investors interested in travel, as the company has been focusing on expanding its footprint in airports. Although the brand's interim results for the six months to the end of February 2025 showed only modest growth of 6% in travel revenue, total travel trading profit rose 12% to £56 million. With plans to open another 90 shops this financial year, WH Smith appears poised for continued growth.
Finally, the coach operator Mobico Group (formerly known as National Express) has experienced growth due to ongoing train delays and strikes, as consumers look for cheaper alternatives to rail travel. Group revenue was up 9% in the first quarter of the year, driven by strong performance from its European arm ALSA. While the UK saw only a 2% rise, the company's operations in Spain and Germany have shown significant growth.
- Investors looking to capitalize on the travel sector's resurgence may find potential in UK budget airline easyJet, given its increasing third-quarter bookings and profit in its holidays business.
- Whitbread, the owner of budget hotel chain Premier Inn, has seen an uptick in demand for staycations, with total accommodation sales outperforming the market, offering another option for investors interested in the travel industry.
- For those keen on investing in various aspects of the travel lifestyle, companies such as WH Smith, with plans to expand in airports, or the coach operator Mobico Group, benefiting from train delays and strikes, present attractive opportunities.
