It’s that time of year when stressed holidaymakers are navigating packed airports or loading their cars to breaking point for a UK staycation.
There are the usual challenges – from striking baggage handlers to IT glitches – but even these problems shouldn’t be enough to derail the annual tourism boost that will see billions of pounds spent with travel-related businesses around the world.
International tourism is now a multi-trillion-dollar sector, contributing an impressive 9.1% to global gross domestic product (GDP), according to the World Travel & Tourism Council (WTTC).
It’s recovered well from the devastating blow suffered during the Covid-19 lockdowns four years ago, with people eager to see the world again.
UK residents made 86.2 million visits abroad in 2023 – up from 71 million the previous year (source: Office for National Statistics (ONS)). Brits splashed out a whopping £72.4bn on these trips, which was £13.9bn more than 2022. Spain, France, Italy and Greece were the favoured destinations.
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But it’s not just foreign businesses that benefitted. There was also an increase in the number of foreign visitors to the UK – and the amounts they spent once they were here.
Overseas residents made 38 million trips to the UK in 2023 (31.2 million in 2022) and spent £31.1bn, which represented a year-on-year increase of £4.6bn.
Tour operators, airlines, car hire firms, hotels, restaurants and myriad other retailers have all enjoyed a share of this cash bonanza. But which companies and sectors are most likely to benefit from this summer’s tourism boost, and are there ways for retail investors to get in on the action?
Globetrotting and global investing
One of the travel companies you may have opted to book with is Jet2. The leisure group comprises an airline flying to 70 European destinations and a tour operator running package holidays. This is currently one of the largest holdings in the Allianz UK Listed Opportunities.
Of course, holidaymakers heading overseas will obviously need to consider travel insurance, which has grown into a multi-billion-dollar market in recent years.
The Schroder Recovery fund holds banking giants Barclays, NatWest and Lloyds Banking Group, which all offer insurance policies, as well as specialist provider Direct Line Insurance.
Holidaymakers need somewhere to stay. The Artemis Leading Consumer Brands fund has holdings in two industry giants: Hilton Worldwide and Marriott International.
Alternatively, another one of the group’s funds, Artemis US Smaller Companies, invests in Hyatt Regency, which offers accommodation across the globe.
An alternative way to get access to hotels is through the TIME:Commercial Long Income fund, which aims to generate a return by acquiring properties with long leases.
Its largest holdings include Holiday Inn in Southend, Premier Inns in Peterborough and Great Yarmouth, and Travelodges in Sheffield and Kingston.
Those who opted for a UK-based holiday might prefer to travel by train this summer.
One of the companies that’s dialled into this market is Trainline, which sells train tickets and railcards. The company is currently held by the WS Amati UK Listed Smaller Companies fund, which aims to achieve long-term capital growth over periods of at least five years.
Whether you’re jet-setting around this summer or sticking closer to home, someone, somewhere is benefitting… and your investment portfolio could too!
Darius McDermott is managing director of FundCalibre and Chelsea Financial Services
