4 ETFs To Ride On Busy Labor Day Weekend Travel

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Travel during this Labor Day holiday weekend is expected to rebound to pre-pandemic levels and set new records. Investors seeking to tap this trend could consider ETFs that stand to profit big time from an upbeat Labor Day travel weekend.

As such, ETFMG Travel Tech ETF (AWAY - Free Report), Defiance Hotel, Airline, and Cruise ETF (CRUZ - Free Report), ALPS Global Travel Beneficiaries ETF (JRNY - Free Report), and AdvisorShares Hotel ETF (BEDZ - Free Report) look like intriguing picks. An increase in travel demand should boost revenues and profitability for the travel and tourism industry, thereby leading to higher share prices.

AAA predicts this to be the busiest Labor Day travel weekend in three years, reaching pre-pandemic levels. A survey found that about 32% of Americans will travel for Labor Day weekend, with more than 80% of people taking their cars. With all major airports seemingly packed, AAA expects domestic bookings to be up 22% from the last year and international reservations to rise 104%.

According to the travel app Hopper, more than 12.6 million passengers are scheduled to fly from U.S. airports over the holiday weekend. The most popular destinations include Las Vegas, Denver and Atlanta.

American Airlines (AAL) estimates 2.5 million customers will fly this Labor Day weekend on its 26,400 scheduled flights, with its busiest travel days expected to be Thursday and Friday. This is nearly 800 more flights than last year. Delta (DAL) says it will carry 2.8-2.9 million passengers on more than 25,00 flights over the holiday travel period — more than the 2.5 million passengers who flew with the airline last year. United Airlines (UAL) said it anticipates 2.6 million customers, a 20% jump from last year.

Passengers are paying more to fly this year — an average of $278 round-trip, up 23% from last year, according to Hopper's research. Though flights are expensive, hotel prices have actually come down to an average of $189 per night for the holiday weekend from the peak in June of $193 per night.

For travelers hitting the road, AAA says the national average gas price will be the highest since 2012, despite falling throughout the summer. Gas prices have declined since reaching the $5 per gallon highs in June.

ETFMG Travel Tech ETF (AWAY)

ETFMG Travel Tech ETF is the first ETF that offers direct access to the technology-focused global travel and tourism industry. It follows the Prime Travel Technology Index, charging investors 75 basis points (bps) in annual fees. ETFMG Travel Tech ETF holds 32 stocks in its basket, with travel bookings & reservations companies accounting for 54% of assets, followed by a 15.4% share in travel price comparison firms.

ETFMG Travel Tech ETF has accumulated $184.5 million in its asset base and trades in an average daily volume of 126,000 shares.

Defiance Hotel, Airline, and Cruise ETF (CRUZ)

Defiance Hotel, Airline, and Cruise ETF tracks the BlueStar Global Hotels, Airlines, and Cruises Index, which measures the performance of globally listed companies primarily engaged in the travel and tourism industries. Holding 56 stocks in its basket, American firms make up 51.4% of the portfolio, while the United Kingdom, Panama, and Japan round off the next three with single-digit exposure each.

Defiance Hotel, Airline, and Cruise ETF has gathered around $36.7 million in its asset base and charges 45 bps in annual fees. Volume is lower as it exchanges around 35,000 shares a day on average.

ALPS Global Travel Beneficiaries ETF (JRNY)

ALPS Global Travel Beneficiaries ETF provides diversified exposure to the global travel industry by tracking the S-Network Global Travel Index. The fund invests in 79 companies engaged in booking and rental agencies, airlines and airport services, hotels, casinos and cruise lines, along with travel-related companies identified through machine learning algorithms, such as luxury retail, entertainment, leisure, food and beverage and payment processing vendors.

ALPS Global Travel Beneficiaries ETF has accumulated $11.6 million in its asset base and charges 65 bps in annual fees. JRNY trades in an average daily volume of 4,000 shares.

AdvisorShares Hotel ETF (BEDZ)

AdvisorShares Hotel ETF is the actively managed and only ETF investing exclusively in global hotel and travel-related services. AdvisorShares Hotel ETF holds 30 stocks in its basket that are pretty spread across components.

AdvisorShares Hotel ETF charges 99 bps in annual fees and trades in an average daily volume of 2,000 shares. It has amassed $6.1 million in its asset base.

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