Revenge spending may keep the economy chugging along
Now that some mask and vaccine mandates are being lifted, consumers seem ready to spend on travel and other leisure experiences. Call it the “revenge spending” phenomenon.
Airline and hotel stocks have been surging this year thanks in part to a spate of long overdue revenge spending, or what some are dubbing the YOLO economy. An ETF of travel companies run by investing firm SonicShares, with the ticker symbol of “TRYP” is up nearly 6% this year while the S&P 500 has fallen 9%.
United (UAL) and American (AAL) both reported strong earnings earlier this week. Shares of Marriott (MAR), Hilton (HLT) and Wyndham (WH) are near all-time highs. Theme park owner SeaWorld (SEAS) is not far from a record high, too. And shares of cruise line operators Norwegian (NCLH) and Royal Caribbean (RCL) are both up this year despite the broader market selloff.
These companies are thriving despite the fact that consumer prices are soaring and many Americans have a downbeat view of the economy because of sky-high inflation and rising interest rates.