When it comes to investing, identifying positive and also negative thematics can be an important way to help your portfolio outperform.
In the case of a positive thematic, exposure to stocks which benefit can help drive your portfolio higher and help them outperform against the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).
Meanwhile, in the case of a negative thematic, not holding stocks exposed can limit losses.
There are two specific reasons that the tourism market look favourable at the moment, but one of the reasons is the real driving force behind the thematic.
Firstly, investors can have reasonable confidence that the long-term outlook for the Australian tourism sector is positive. This general tailwind is thanks to a range of factors including an ability to grow at least in line with inflation as it benefits from a rising domestic population and per capita income, a rising Chinese middle class looking to travel and Australia's image as a safe, clean and exciting travel destination.
Secondly, the slump in the Australian dollar back towards its long-term average against the US dollar has made Australia as a destination for tourism significantly more appealing. In other words, the buying power for foreigners looking to holiday in Australia has been greatly improved by exchange rate movements. Correspondingly, the cost for Australians looking to holiday overseas has increased substantially which makes a domestic holiday (in many cases) a more cost effective option.
Three stocks which stand to benefit from this trend are Ardent Leisure Group (ASX: AAD), Amalgamated Holdings Limited (ASX: AHD) and Village Roadshow Ltd (ASX: VRL).
All three companies provide exposure to a mixture of entertainment and accommodation services. Ardent operates the theme parks Dreamworld and WhiteWater World in Queensland and the SkyPoint Observation deck on Surfers Paradise. Amalgamated Holdings operates Thredbo Alpine Resort, The State Theatre in Sydney and both the Rydges and QT Hotel and Resort brands. While Village Roadshow operates a range of theme parks on the Gold Coast as well as an adjacent hotel, along with the recently opened Wet'n'Wild in Sydney.
