Three of The Best Travel Stocks To Buy Right Now (BKNG, ABNB, CAR)

The travel industry, once grounded by the pandemic, is soaring again. As vaccines rolled out and borders reopened, pent-up demand fueled a remarkable resurgence. Investors looking to capitalize on this recovery are eyeing travel stocks, but the landscape is diverse and requires careful navigation.

This guide provides an in-depth look at some key players – Booking Holdings (BKNG), Airbnb (ABNB), and Avis Budget Group (CAR) – offering a data-driven comparison and analysis to aid informed investment decisions.

Booking Holdings (BKNG): The Online Travel Behemoth

Booking Holdings isn’t just a travel company; it’s an online travel ecosystem. Home to giants like Booking.com, Priceline, Agoda, KAYAK, and OpenTable, BKNG offers a comprehensive suite of services from hotel reservations and airline tickets to rental cars and restaurant bookings. This diversified portfolio gives it a significant competitive advantage, positioning it as a one-stop shop for travelers worldwide.

The company’s financial performance reflects this dominance. In 2023, BKNG reported revenue of $21.365 billion, a staggering 25.01% increase year-over-year. Net income also surged, reaching $4.289 billion, a 40.26% jump from the previous year.

As of August 22, 2025, BKNG has added 15.95% YTD, and stands out as a leading name in the sector. Analysts generally rate BKNG as a “Buy,” with price targets exceeding current trading levels. This bullish sentiment stems from BKNG’s dominant market position and consistently robust earnings growth. The company’s large market capitalization underscores its stability, and while the P/E ratio might appear high, it reflects investor optimism about future earnings potential.

Compared to its peers, BKNG consistently outperforms in revenue and profit growth, solidifying its position as a leading force in the online travel sector. Recent Q1 2025 results further reinforce this, showcasing an 8% year-over-year revenue increase to $4.8 billion and adjusted earnings rising 21% to $1.1 billion. The company’s aggressive share repurchase program and dividend payouts also signal financial strength and commitment to shareholder value.

Airbnb (ABNB): Disrupting Hospitality with Home-Sharing

Airbnb revolutionized the hospitality industry by connecting travelers with unique accommodations, from single rooms to entire homes. With over 8 million active listings across approximately 220 countries, ABNB offers a diverse range of lodging options that cater to a broad spectrum of travelers.

The company’s Q4 2024 results demonstrated strong growth, with a 12% year-over-year increase in Nights & Experiences Booked, totaling 111 million. This growth was particularly strong in regions like Asia Pacific and Latin America, indicating successful expansion into new markets.

As of August 22, 2025, ABNB’s stock trades around $126.43, down 3.84% since the start of this year, consolidating in a range and searching for a breakout. Analyst ratings are mixed, generally leaning towards “Hold” or “Buy,” with price targets moderately above current levels. This reflects both the company’s growth potential and the inherent risks associated with competition and regulatory scrutiny.

ABNB’s large-cap status signifies its established position in the market, but its high P/E ratio indicates its classification as a growth stock. While EPS is positive and improving, the valuation raises questions about its affordability compared to traditional hotel chains and online travel agencies.

However, recent news paints a mixed picture. While ABNB projected strong Q3 2025 revenue and announced a substantial share buyback program, the company also cautioned about slower growth in the latter half of the year, citing the impact of tariffs and challenging year-over-year comparisons. This led to a stock price decline, highlighting the sensitivity of ABNB’s stock to growth expectations. Concerns about valuation persist, with analysts noting a premium compared to competitors. Despite this, ABNB’s expansion into experiences and its use of AI to enhance user engagement position it as a dynamic player in the evolving travel landscape.

Avis Budget Group (CAR): Rolling Along with Rental Demand

Avis Budget Group is a prominent player in the vehicle rental industry, operating brands like Avis, Budget, and Zipcar. The company offers a wide range of vehicle rental services to both individual and corporate clients across the globe. Its diverse fleet and extensive network cater to various customer needs, from short-term rentals to long-term leasing options.

While its holiday hire fleet has benefitted from the pandemic recovery, ZipCar is the brand under Avis’s banner that shows signs of promise. The car-share market is a growth area and is forecast to expand at a 22.3% CAGR up to 2027, and ZipCar is a significant player in the industry. In cities such as London, where driving is becoming ever more expensive, ZipCar should see demand continue to increase.

As of August 22, 2025, Avis Budget Group’s stock (CAR) is trading at $150.28, reflecting a 1.44% increase from the previous close and a mightily impressive 86% since the start of the year. This positive momentum suggests investor confidence in the company’s growth prospects within the recovering travel industry.

Side-by-Side Comparison and Key Considerations

Investing in Travel: A Strategic Approach

Diversification: Don’t put all your eggs in one basket. Consider diversifying your portfolio across different segments of the travel industry, such as online travel agencies, airlines, hotels, and car rental companies.

Economic Outlook: Travel demand is closely tied to the overall economic outlook. Monitor economic indicators like GDP growth, unemployment rates, and consumer confidence to gauge the potential impact on travel spending.

Competitive Landscape: The travel industry is highly competitive. Stay informed about the latest trends, emerging players, and potential disruptions that could affect the market share and profitability of established companies.

Regulatory Environment: Be aware of regulatory changes that could impact travel companies, such as new taxes, visa requirements, or environmental regulations.

Global Events: Geopolitical events, natural disasters, and health crises can significantly impact travel patterns. Stay informed about these events and their potential impact on the travel industry.

Valuation: Carefully assess the valuation of travel stocks before investing. Consider factors like P/E ratio, price-to-sales ratio, and enterprise value-to-EBITDA to determine whether a stock is overvalued or undervalued.

Travel demand has remained extremely strong despite the impact of soaring inflation and other economic pressures on consumer wallets over the past year or so.

While the travel sector itself still has its own headwinds (air traffic control difficulties in Europe being one), if you scratch the surface, it’s possible to see how they can be overcome over the next year or two. In fact, the current issues suggest the long-term prospects for travel stocks are favourable.

Continuing from last summer, queues at airports, cancelled flights, and other logistical news stories point to the demand for holidays being incredibly resilient. Demand for holiday bookings has surged and is testing the ability of operators to keep up.

While the experience of some customers last summer and this summer may not be what is expected (depending on how bad the chaos is this year). However, it doesn’t suggest they’ll hold back from trying to book holidays again in the future.

Optimising your travel stocks strategy does require considering how the pandemic has changed consumer habits. While ‘Airbnb‘ and ‘staycation’ were previously buzzwords of the new normal, they have now taken a step back. Even though working from home has been reduced, it should still result in more people taking long weekend breaks.

Conclusion: Navigating the Skies with Confidence

The travel industry offers compelling investment opportunities, but success requires careful research, a strategic approach, and a thorough understanding of the risks and rewards. Booking Holdings, Airbnb, and Avis Budget Group each offer unique value propositions within the sector.

BKNG’s diversified services and robust financial performance make it a relatively stable choice, while ABNB’s disruptive innovation offers higher growth potential but also comes with increased volatility. Avis Budget Group provides exposure to the car rental market, which is closely tied to overall travel demand.

By carefully considering these factors and conducting thorough due diligence, investors can navigate the post-pandemic skies with confidence and potentially reap the rewards of the travel industry’s ongoing recovery.

Remember always to consult with a qualified financial advisor before making any investment decisions.