Even though the economy is reopening thanks to an extensive vaccination drive, the travel industry is far from returning to its pre-pandemic revenue levels. So, we think it wise to avoid struggling travel stocks Booking Holdings (NASDAQ:BKNG), Airbnb (ABNB), and Carnival (NYSE:CUK) (CCL). Their continued financial weakness may lead these stocks to further price declines in the near term. Read on.The travel industry was hit badly by the COVID-19 pandemic as traveling practically came to a halt owing to restrictive containment measures. The industry received a ray of hope in November 2020 as Pfizer , Inc.'s (NYSE:PFE) COVID-19 vaccine was found to be effective. But although half of American adults are now fully vaccinated against the coronavirus, the travel industry has yet to see a robust revival of demand for travel.
It’s expected to be a long time before the global travel industry returns to pre-pandemic business levels because many countries are still experiencing new COVID-19 infections. Furthermore, many Americans are still resistant to receiving the COVID-19 vaccine, which is contributing to the challenging backdrop the industry faces. Adding to concerns, most travel-related companies have huge debt loads and are expected to lose money again this year.
Booking Holdings Inc. (BKNG), Airbnb, Inc. (ABNB), and Carnival Corporation & plc (CCL) are three struggling stocks in the travel sector. Along with the weak industry backdrop, we think their weak financials make these stocks best avoided now.