5 ETFs To Make The Most Of Busy Memorial Day Travel

orange train between fall trees

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Travel during this Memorial Day holiday weekend is expected to return to near pre-pandemic levels. More Americans are expected to travel given a rapid return of business and international travel along with vaccine acceptance and the reopening of borders. Air travel has rebounded strongly, jumping 25% over the last year — the second-largest increase since 2010.

An increase in travel demand should boost revenues and profitability for the travel and tourism industry, thereby leading to higher share prices. Investors can tap this trend through ETFs that stand to profit big time from an upbeat Memorial Day travel trend. As such, ETFMG Travel Tech ETF (AWAY - Free Report), Defiance Hotel, Airline, and Cruise ETF (CRUZ - Free Report), SonicShares Airlines, Hotels, Cruise Lines ETF (TRYP - Free Report), ALPS Global Travel Beneficiaries ETF (JRNY - Free Report) and AdvisorShares Hotel ETF (BEDZ - Free Report) look like intriguing picks.

According to travel service provider American Automobile Association (“AAA”), about 39.2 million Americans will travel 50 miles (80 km) or more over the Memorial Day weekend (May 26-30), up 8.3% from last year's Memorial Day weekend. Of them, 34.9 million are expected to go on a road trip, 3.01 million would fly, and 1.33 million would travel by train and other modes (including buses and cruises).

Despite historically high gas prices, about 89% of Americans are expected to hit the roads. Motorists are expected to pay the highest-ever gas price this weekend. The national average price of gasoline is projected to hit $1.50 per gallon.

Although daily car rental rates have declined 16% from last Memorial Day to an average of $100, the average lowest airfare is 6% more than last year at $184 per ticket, with Saturday being the most expensive day to fly and Monday the least. Additionally, mid-range hotel rates have increased about 42%, with the average lowest nightly rates ranging between $199 and $257 for AAA Approved Hotels.
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 bps in annual fees. ETFMG Travel Tech ETF holds 33 stocks in its basket, with travel bookings & reservations companies accounting for 54.1% of assets, followed by a 15.6% share in travel price comparison firms.

ETFMG Travel Tech ETF has accumulated $241.8 million in its asset base and trades in an average daily volume of 203,000 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 55 stocks in its basket, American firms make up for 72.3% of the portfolio, while Britain, Japan and Ireland round off the next three with single-digit exposure each.

Defiance Hotel, Airline, and Cruise ETF, launched in June 2021, has gathered around $43.4 million in its asset base and charges 45 bps in annual fees. Volume is lower as it exchanges around 58,000 shares a day on average.

SonicShares Airlines, Hotels, Cruise Lines ETF (TRYP)

SonicShares Airlines, Hotels, Cruise Lines ETF provides exposure to a global portfolio of companies focused on what many investors consider to be the “core” of business and leisure travel: the airline, hotel, and cruise line industries. It tracks the Solactive Airlines, Hotels, Cruise Lines Index, holding 62 stocks in its basket.

SonicShares Airlines, Hotels, Cruise Lines ETF was launched in the space in May and has accumulated $10.9 million in its asset base so far. TRYP trades in an average daily volume of 38,000 shares and charges 75 bps in annual fees.

ALPS Global Travel Beneficiaries ETF (JRNY)

ALPS Global Travel Beneficiaries ETF, which was launched on Sep 7, provides diversified exposure to the global travel industry by tracking the S-Network Global Travel Index. The fund invests in 74 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 $7.9 million in its asset base and charges 65 bps in annual fees. JRNY trades in an average daily volume of 2,000 shares.

AdvisorShares Hotel ETF (BEDZ)

AdvisorShares Hotel ETF is the actively managed and only ETF investing exclusively in the 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 3,000 shares. It has amassed $5.1 million in its asset base.

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