Best Travel Stocks in India

In this article, we will discuss

• An Overview of the Indian Travel and Tourism Industry
• The Best Travel Stocks in India in 2024
• Things to Keep in Mind Before Investing in Travel Stocks
• Conclusion

The Indian travel industry has grown by leaps and bounds over the years owing to rising disposable income and a rapidly expanding middle-class population. However, the COVID-19 pandemic derailed the industry completely and left its future uncertain. With the fog over the industry lifting, investing in travel stocks in India could potentially be an attractive opportunity to capitalise on the sector's resurgence.

In this article, we are going to briefly explore the industry and delve into some of the best travel and tourism-related stocks you can consider adding to your portfolio in 2024.

An Overview of the Indian Travel and Tourism Industry

Travel and tourism are the largest among all the service industries in India. In fact, the industry’s contribution to the country’s Gross Domestic Product (GDP) was about 5.9% of the entire Gross Domestic Product (GDP) of India as of FY2022.

According to various estimates, the industry is poised to grow rapidly in the coming years. The travel market is likely to touch $125 billion by 2027, with international tourist volume projected to increase to 30.5 million by 2028. In terms of employment, the industry is likely to provide jobs to 53 million individuals by 2029.

Although there was a major slump in domestic travel and tourism during the COVID-19 pandemic, the industry has rebounded strongly and is continuing to do so. The primary drivers of this sharp rebound are government initiatives to promote tourism, a growing preference for experiential travel and social media influence.

Technological advancements and digital platforms have also played a major role in revolutionising travel and tourism in India. The simplification of planning and booking tickets and experiences has encouraged more individuals to travel, often on a whim.

As India continues to develop travel infrastructure, including airports, railways and highways, the travel and tourism sector will flourish further in the near future. Combined with a growing market of eager travellers, investing in travel companies’ shares seems like an attractive opportunity for long-term wealth creation.

The Best Travel Stocks in India in 2024

With so many good travel and tourism-related stocks to choose from, you may find it challenging to pick the one that is right for you. Tabulated below are some of the top travel stocks you can consider investing in 2024 along with their key fundamental metrics.

Note: All of the values in the table are valid as of May 20, 2024.

• Thomas Cook (India) Limited

Thomas Cook (India) Limited is one of the leading integrated travel and travel-related service providers in India. The company is known for offering a wide range of domestic and international tour packages. Additionally, it also offers a range of foreign exchange services ranging from buying and selling currencies to forex and multi-currency cards.

Known for its innovation, Thomas Cook (India) Limited offers a range of personalised and customisable travel experiences to cater to young travellers. The company also offers the ability to book hotels and flights through its portal at attractive rates. Thomas Cook (India) Limited has consistently been the recipient of several travel and tourism awards in India and abroad.

• Dreamfolks Services Limited

Incorporated in 2013, Dreamfolks Services Limited is a global lifestyle and travel services aggregator. The company’s primary business vertical is providing multiple airport services such as lounge access and airport spa treatments to airport transfers and transit hotels.

Presently, Dreamfolks Services Limited has an unassailable 90% market share in the lounge access segment in India. The company has tie-ups with a wide range of banks, card networks and airlines through which it delivers the services. The asset-light business model and strategic partnerships with global service providers make Dreamfolks Services Limited a unique player in the travel ecosystem and one of the best travel stocks to invest in.

• Indian Railway Catering & Tourism Corporation Limited

One of the largest travel and tourism-related stocks in terms of market capitalisation, the Indian Railway Catering & Tourism Corporation Limited (IRCTC) is a state-owned enterprise that handles online ticketing operations for the Indian Railways. In addition to providing a platform for booking train tickets, IRCTC also offers catering and tourism services.

Through the IRCTC web portal, travellers can also book retiring rooms and hotels, exclusively charter trains or coaches and holiday and rail tour packages, among others. The company has a strong revenue stream thanks to its monopoly in online ticketing and catering services for the Indian Railways.

IRCTC has consistently been making efforts to enhance service quality, expand its product offerings and improve customer satisfaction, all of which are likely to yield positive results in the near future.

• BLS International Services Limited

One of the largest visa consultancy service providers in India, BLS International Services Limited has over 18 years of experience in the field. The portfolio of services that the company provides includes visa processing, citizen and front-end services, consular services, e-visas, biometrics and identity management and verification and attestation services. BLS International Services Limited has active collaborations with more than 46 governments, diplomatic missions, consulates and embassies.

In addition to India, the company is operational in 63 other countries in various parts of the world and has over 50,000 offices globally. BLS International Services Limited also has 4 global training centres where more than 60,000 of its employees are trained stringently on various visa-related services. As global travel continues to pick up pace, the demand for visa and consular services may rise, which is likely to hugely benefit BLS International Services Limited.

• Easy Trip Planners Limited

Among the fastest-growing travel stocks, Easy Trip Planners Limited is an online travel agency that offers a wide range of services from flight ticket and hotel bookings to holiday and activity bookings. The company provides its entire portfolio of travel and travel-related services under the EasyMyTrip branding.

One of the advantages that the company has over other similar online travel agencies is its loyal customer base which it has managed to build by offering highly competitive pricing and attractive offers and discounts.

EaseMyTrip’s strong online presence and efficient digital platform have enabled it to capture significant market share. As travel demand continues to surge, the company is likely to see increased transaction volumes, which can drive revenue and profitability. That said, it is also important to note that the online travel agency space is highly competitive and has many key players.

• Yatra Online Limited

Yatra Online Limited is another one of the very popular travel stocks in India. A prominent player in the online travel services space, the company offers an array of travel-related services. These include flight tickets, hotel bookings, holiday packages, bus and train tickets, cabs, visas, cruises, adventures, activities and other travel-related services.

One of the many advantages that Yatra Online Limited enjoys is its significant brand presence, which it leverages to build a strong customer base for itself. The company also caters to more than 800 corporates under Yatra for Business and is the leader in business travel in India. Yatra Online Limited’s strategic focus on enhancing its technology platform and expanding its corporate travel segment is likely to bear fruit in the long run.

• India Tourism Development Corporation Limited

The India Tourism Development Corporation Limited (ITDC) is another public sector undertaking offering one-stop solutions for all travel, tourism and hospitality-related needs. The company is involved in the development, promotion and management of tourism infrastructure and services in the country. Currently, ITDC owns over 17 properties under the Ashok Group of Hotels.

In addition to operating hotels, restaurants, duty-free shops and transport facilities, the company also offers an extensive range of travel and tour packages under Ashok Travels & Tours (ATT). ITDC plays a pivotal role in promoting tourism in India and is most likely to benefit from government initiatives and policies aimed at boosting the sector. The company’s diverse portfolio of services and strategic presence in key tourist locations within India are key reasons for its stable revenue base.

• International Travel House Limited

Established in 1981, the International Travel House (ITH) Limited is India’s first-ever listed travel company. It offers comprehensive travel management services including corporate travel, leisure travel, car rentals and event management. The company is an associate of one of India’s largest conglomerates in terms of market capitalisation - ITC Limited.

ITH’s focus on providing cost-effective packaged travel solutions to key leisure destinations within and outside the country is a major draw for young travellers. The company also caters to business clientele by providing corporate travel advisory services, transient accommodation services (TAS) and Emergency Travel Services (ETS).

With corporate and leisure travel rebounding to pre-pandemic levels, International Travel House is well-positioned to benefit from the increasing demand, making it one of the best travel and tourism-related stocks to have in your portfolio.

Things to Keep in Mind Before Investing in Travel Stocks

Although investing in travel and tourism-related stocks does have its advantages, there are certain aspects you must consider before investing in the industry.

• Regulatory Environment

Government policies and regulations can significantly impact travel companies. As an investor, it is important to keep an eye on regulatory changes and their potential effects.

• Domestic and International Demand

The travel and tourism industry is heavily reliant on the demand from domestic and international travellers. It is advisable to look into the travel statistics and patterns of travellers to gain insights into the demand before investing.

• Market Volatility

The travel and tourism industry is highly sensitive to economic cycles, geopolitical events and major health crises. These events can lead to volatility in travel stocks. Therefore, the market conditions and macroeconomic situations are some of the most crucial factors you need to account for when investing.

• Competitive Landscape

The travel industry is very competitive with both organised and unorganised players vying for a market share. As an investor, you must ensure that you thoroughly analyse the competitive landscape before investing. Selecting travel stocks with few competitive pressures and high barriers of entry can be advantageous in the long run.

• Diversification

The travel and tourism industry is made up of several sub-segments - online travel agencies, travel service providers and hospitality, among others. Diversifying your investments across these segments could potentially lower risk and enhance your returns.

Conclusion

As the Indian travel and tourism industry continues to expand, investing in fundamentally strong travel stocks could be a good way to create wealth in the long term. That said, since each stock has its own unique strengths, growth drivers and risk factors, you must ensure that you do thorough research and analyse the various entities before investing.

Also, ensure that you consider the various factors that are likely to influence the industry as a whole. This way, you can effectively capitalise on the resurgence of the travel sector by making informed decisions.

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