Holiday Travel Takes Flight; Will the ETFs?

It’s that time of year again. Millions of Americans will fork over their hard-earned cash and stand in long lines at the airport, all to visit their families and celebrate the holidays. But will exchange traded funds (ETFs) reap the rewards of the increased air traffic?

Holiday travel is expected to be down this year for the first time in a decade. Around $4.05 billion is expected to be lost, but it may not be for the reasons you’d think. Although the economy is still on shaky ground, many travelers may also be planning to stay home because of the H1N1 flu virus, reports Meeting News.

Airline fees could be the final nail in the industry’s coffin. Many carriers continue to slam customers with fees by exploiting peak travel days around the holidays, a move that is counterproductive to the business climate. Most people traveling still want to spend as little as possible, and fees could be a deterrent.

According to the South Florida Business Journal, there are some reasons to be optimistic about the upcoming season. Nearly 45% of Americans plan to take a vacation in the period beginning Thanksgiving week through March 2010. Conditions appear to be stabilizing, a representative from Deloitte noted.

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• PowerShares Dynamic Leisure & Entertainment (NYSEArca: PEJ): up 39.5% year-to-date; Priceline 5%; Expedia 4.8%

• Claymore/NYSE Arca Airline (NYSEArca: FAA): up 13.5% in the last three months; Southwest Airlines 15.3%; Delta 15.2%; Continental Airlines 14.1%