Despite the economy still experiencing high inflation as it plays the waiting game on interest rate cuts by the Federal Reserve, consumers aren’t staying away from travel and tourism expenses. This year, the Transportation Security Administration (TSA) is expecting heavy volume as spring break travel picks up.
In fact, TSA was already experiencing an influx of travelers last year as a record number of passengers took to the skies for vacationing and leisure. As the world continues transitioning out of the effects of the pandemic and social distancing measures, this upward trend could continue. TSA is already seeing record numbers this year, surpassing 2023’s volume.
“TSA screened a record number of passengers in 2023, and we expect that trend to continue this year,” said TSA Administrator David Pekoske, in a release. “So far in 2024, travel volumes are trending at nearly 6% above the same period in 2023. We always work closely with our airline and airport partners to plan for and meet the increasing travel demand while doing our best to maintain our wait times of 30 minutes or less in standard lanes and 10 minutes or less in TSA PreCheck lanes.”
After spring break, the warmer summer climate will eventually give way to more travel in the coming months. When the Fed finally does institute rate cuts, that could also fuel more travel and tourism, as consumers may be more apt to spend. That said, investors may want to take advantage of names within this sector, whether it’s for a short-term gain or a long-term buy-and-hold through the rest of the year.
Double Leverage Travel and Tourism
While traders can look to individual stocks to capture the profit potential of increased travel and vacationing for this upcoming holiday season, there’s an easier solution: the Direxion Daily Travel & Vacation Bull 2X Shares (OOTO). The fund focuses on returning 200% of the BlueStar Travel and Vacation Index.
The index exposes traders to global commercial airlines, hotels, resorts, resort casinos, travel agencies, online travel booking sites, hotel REITs, cruise lines, theme parks, and ski resorts. Given this, its top three holdings include names like Booking Holdings, Marriott, and Hilton.
With the fund’s use of double leverage, traders can look to amplify their returns with OOTO especially if the fund maintains its recent upward trajectory. However, that amplification also applies to losses, so only seasoned investors should use these tactical strategies.
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