Are We In A Bubble?

Vacationing Is Back

People are spending money on vacations again. The only question is how much higher hotel occupancy and flying will be than it was before the pandemic. There is about to be a boom, unlike anything we have seen in decades. As you can see from the chart below, the U.S. hotel occupancy rate reached 52% in the 2nd week of March which is the highest since the pandemic started but 12 points below the peak in February. According to Alexa, Priceline.com went from the 2,460th most popular website 90 days ago about to the 1,923rd most popular website today. Expedia.com has seen a large increase in traffic since November. It had 31.1 million total views in November. That increased to 36.21 million in February. It probably increased even further in March.

Flying is also rebounding, but it’s not as close to normal as hotel occupancy is. As you can see from the chart below, the 7 day moving average of passengers going through airport security has gotten to a new post-pandemic high of about -45% yearly growth. The yearly decline since February 22nd is based on 2019 data to remove base effects. From January to February, traffic on JetBlue.com increased 10% to 7.7 million.   

Retail Is Booming

Retail sales growth is about to be fantastic. Sale store sales readings for reopening companies like clothes stores will be around as strong as they were for the stay-at-home stores last year. As you can see from the chart below, the latest Evercore ISI retail sales reading is by far the highest in the past 4 years. There will be a much bigger spending boom than there was in January. The stimulus was larger and there is much more job creation.

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Disclaimer: The content in this article is for general informational and entertainment purposes only and should not be construed as financial advice. You agree that any decision you make will be ...

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