As the Omicron surge begins to fade, travellers are starting to be more active again, with U.S. airports seeing their busiest weekend since Thanksgiving last week. The boost in passenger volumes might be a sign that the travel and leisure industry is set to recover from its pandemic-era lows, benefiting related exchange-traded funds (ETF) along the way.
Last weekend, the U.S. Transportation Security Administration (TSA) screened nearly 8.4 million passengers from Friday through Monday, more than double the number of travelers from a year ago but still down 7.5% from the 9 million screened before the pandemic began in 2020.
While the first two months of 2022 have also been below their comparable pre-pandemic passenger volume, according to TSA data, last weekend was another sign that people are ready to travel again as restrictions start to ease, especially as individuals have access to highly effective vaccines. That pent-up demand is poised to spill over to the upcoming spring and summer months, which are typically popular for travel.
With nearly $3.9 billion in assets under management, the U.S. Global Jets ETF (NYSE: JETS) is one of the largest travel and leisure focused ETF that could benefit from more traveling Americans. This fund offers exposure to airlines in the United States as well as other global carriers, with its top holdings consisting of names like Delta Air Lines (NYSE: DAL), United Airlines (NASDAQ: UAL), Southwest Airlines (NYSE: LUV) and American Airlines (NASDAQ: AAL).
Beyond JETS, there are a couple near ETFs that are set to benefit from the recovering travel sector. These include the ETFMG Travel Tech ETF (NYSE: AWAY) and the Defiance Hotel, Airline, and Cruise ETF (NYSE: CRUZ). AWAY offers investors a more tech-focused approach to the travel industry, with its portfolio holding larger weights in names like Airbnb (NYSE: ABNB), Expedia (NASDAQ: EXPE) and TripAdvisor (NASDAQ: TRIP). Meanwhile, CRUZ offers a more pure-play approach outside of just airlines, with its holdings including hotel stocks like Marriott (NASDAQ: MAR) and Hilton (NYSE: HLT), as well as cruise liners like Carnival (NYSE: CCL) and Royal Caribbean (NYSE: RCL).