The U.S. travel booking and hospitality industry in 2025 will likely be characterized by resilience, innovation, and a focus on meeting evolving customer demands amid uncertain global conditions.

Given the industry’s tailwinds, investors could consider buying fundamentally sound travel stocks, Booking Holdings Inc. (BKNG - Get Rating), Expedia Group, Inc. (EXPE - Get Rating), and Travel + Leisure Co. (TNL - Get Rating).

The travel industry is experiencing a major shift as new trends are changing how people engage with travel. More travelers are becoming aware of their ecological footprint and increasingly choosing destinations and accommodations emphasizing sustainability. As a result, eco-tourism initiatives have expanded, and destinations recognized for their conservation efforts are gaining popularity.

Moreover, the ongoing digital transformation is expected to play a significant role, with AI, automation, and advanced booking platforms streamlining operations, enhancing customer experiences, and offering personalized travel options. Tourism Council recently estimated that travel levels will increase an average of 5.8% through 2032, a rate more than double the forecast for overall economic growth.

Considering these encouraging trends, let’s take a look at the fundamentals of the three best travel stocks.

Booking Holdings Inc. (BKNG - Get Rating)

BKNG provides travel and restaurant online reservations and related services worldwide. The company offers online accommodation, travel reservations, rental car reservation services, and vacation packages through five primary consumer-facing brands: Booking.com, Priceline, Agoda, KAYAK, and OpenTable.

BKNG’s trailing-12-month net income margin and EBIT margins of 21.85% and 28.70% are 404.2% and 254.3% higher than the respective industry averages of 8.10% and 4.33%.

For the fiscal third quarter, which ended on September 30, 2024, BKNG’s total revenues increased 8.9% year-over-year to $7.99 billion, while its operating income rose 2.4% from the year-ago value to $3.18 billion. The company’s adjusted net income amounted to $2.84 billion and $83.89 per share, up 9.2% and 16% from the prior-year quarter, respectively. Also, its adjusted EBITDA grew 11.6% from the prior-year quarter to $3.67 billion.

The consensus revenue estimate of $5.18 billion for the fiscal fourth quarter (ended December 2024) represents an 8.3% increase year-over-year. The consensus EPS estimate of $35.94 for the about-to-be-reported quarter indicates a 12.3% improvement year-over-year. The company has an excellent surprise history; it surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.

Over the past nine months, the stock has gained 36.1%, closing the last trading session at $4,686.41.

BKNG’s POWR Ratings reflect its positive outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

The stock has an A grade for Quality. It is ranked #18 out of 48 stocks in the Internet industry.

Beyond what is stated above, we’ve also rated BKNG for Growth, Momentum, Value, Stability, and Sentiment. Get all BKNG ratings here.

Expedia Group, Inc. (EXPE - Get Rating)

EXPE offers a variety of travel products through brands like Expedia, Hotels.com, and Vrbo, providing services to individual travelers with lodging, flights, and car rentals. Its B2B services support airlines, travel agents, and corporations with travel technology, while trivago connects users to hotel options through its metasearch platform.

EXPE’s trailing-12-month net income margin of 7.97% is 83.9% higher than the industry average of 4.33%. Its trailing-12-month EBIT margin of 11.41% is 40.8% higher than the 8.10% industry average. Also, the stock’s trailing-12-month EBITDA margin of 12.84% is 11.7% higher than the 11.49% industry average.

During the fiscal third quarter that ended September 30, 2024, EXPE’s revenues increased 3.3% year-over-year to $4.06 billion. Its operating income grew 25.5% from the year-ago value to $762 million. In addition, the company’s adjusted net income attributable to Expedia Group, Inc. and adjusted EPS came in at $809 million and $6.13, up 4% and 13.3% over the prior-year quarter, respectively.

Analysts expect EXPE’s EPS and revenue for the fourth quarter ended December 31, 2024, to increase 21.8% and 6.4% year-over-year to $2.09 and $3.07 billion, respectively. It surpassed Street EPS estimates in each of the trailing four quarters, which is promising.

Over the past year, the stock has gained 23.2% to close the last trading session at $181.40.

EXPE’s POWR Ratings reflect bright prospects. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system.

EXPE has an A grade for Quality and a B for Value. It is ranked #3 in the Internet industry.

In addition to the POWR Ratings highlighted above, one can access EXPE’s ratings for Momentum, Stability, Growth, and Sentiment here.

Travel + Leisure Co. (TNL - Get Rating)

TNL offers global hospitality services through two segments: Vacation Ownership, offering vacation ownership interests, and resort management. Travel and Membership offers vacation exchanges, travel memberships, rentals, and booking technology solutions.

TNL’s trailing-12-month net income margin and EBIT margins of 10.99% and 19.56% are 153.8% and 141.5% higher than the respective industry averages of 4.33% and 8.10%.

TNL’s net revenues increased marginally year-over-year to $993 million in the fiscal third quarter that ended on September 30, 2024. Its operating income came in at $189 million. In addition, the company’s adjusted net income came in at $110 million, and adjusted EPS came in at $ 1.57, up 4% over the prior-year quarter.

Street expects TNL’s revenue for the fiscal year (ended December 31, 2024) to increase 2.8% year-over-year to $3.85 million. Its EPS for the same year is expected to grow marginally from the prior year to $5.71. In addition, it surpassed the consensus EPS estimates in three of the trailing four quarters.

TNL’s stock has increased 22.5% over the past nine months and 38% over the past year to close the last trading session at $53.39.

TNL’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which equates to Buy in our proprietary rating system.

TNL has a B grade for Value and Sentiment. It is ranked first in the Travel – Hotels/Resorts industry.

Click here to access the additional TNL ratings (Momentum, Quality, Growth, and Stability).

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BKNG shares were trading at $4,626.58 per share on Wednesday afternoon, down $59.83 (-1.28%). Year-to-date, BKNG has declined -6.88%, versus a 3.56% rise in the benchmark S&P 500 index during the same period.

About the Author: Nidhi Agarwal

Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities. More...

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