The resurgence of COVID-19 cases owing to the recent breakout of the highly infectious omicron variant will likely affect the travel and tourism industry this holiday season. This, combined with ongoing market volatility, makes overvalued travel stocks Carnival (NYSE:CUK) (CCL), MakeMyTrip (MMYT), Wheels Up (UP), and Lindblad Expeditions (LIND) susceptible to pullbacks in the near term. Thus, it is wise to avoid them now.The travel and tourism industry steadily recovered earlier this year, owing to solid progress on the vaccination front, declining COVID-19 case counts, and gradual lifting of the international travel ban. The industry also witnessed advanced travel and hotel bookings ahead of the holiday season. However, the recent discovery of the highly transmissible omicron variant in South Africa has resulted in the reimposition of travel restrictions, as COVID-19 cases rise globally despite increasing vaccination rates. As a result, the travel and tourism industry will likely suffer this holiday season.
Given this backdrop, overvalued travel stocks Carnival Corporation & plc (CCL), MakeMyTrip Limited (MMYT), Wheels Up Experience Inc. (UP), and Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND) are susceptible to pullbacks in the near term. So, they are best avoided now.
Carnival Corporation & plc (CCL)