U.S. travel stocks faced a big blow after the U.K.’s decision to withdraw from the European Union. Institutional investors suggested that the U.K.’s withdrawal might hurt the aviation and hospitality industries along with the OTAs more than any other sector.
Hilton Worldwide, Marriott International, and Expedia Inc. saw a fall of 10% in the first two trading days of the week. Delta Air Lines shares dropped to a 13%low while American Airlines Group and United Continental Holdings plunged more than 17% for the two trading days.
At the end of the week, the travel stocks rebounded slightly but not significantly.
More U.S. travellers seem to be interested in taking advantage of the weaker British pound. Metasearch operator Hipmunk said they have seen an increase in the U.K. trip planning following the Brexit result.
The investors are in a state of circumspection regarding whether or not this will affect the travel habits of the British.
The OTAs’ stock performance has also not been consistent as Priceline shares were down 10% from a week earlier. The Carnival Corp., Norwegian Cruise Line Holdings and Royal Caribbean Cruises Ltd. is still at a low 10% price from a week earlier.
Meanwhile, the U.S. travel stocks had rebounded and the investment specialists trust that international travel will be more hurt by the potential U.K. exit from the E.U. than any other sector.
The value of the British pound dropped to a 31-year low following the referendum which evidently made international travel expensive for the Brits.
Hipmunk reported that following the UK vote, average daily flight searches from the U.S. to the U.K. saw an increase of about 47% than the time period from June 1 to 23. Great Britain surpassed Canada and Mexico in terms of flight-search popularity.
