Flight Centre Travel Group Ltd (ASX: FLT) and  Webjet Limited (ASX: WEB) are both household names in Australia when it comes to booking airfares and planning holidays and are often the first place travellers consider when comparing airfares and other travel related services.

The travel agents are also popular stocks amongst retail investors thanks to their familiarity and well-known brand names.

While both companies operate in the same sector, their business models and target markets are slightly different and this has the potential to create vastly different investment returns. This is demonstrated in the graph below where Webjet outperformed Flight Centre by nearly 72% in 2015.

Source: Google Finance

Source: Google Finance

Interestingly, both shares have vastly outperformed the S&P/ASX 200 (Index: ^AXJO) (ASX:XJO) over the last one, three, five and ten-year investment periods and have delivered excellent long-term returns for shareholders.

Moving into 2016, both companies appear well placed to deliver another strong year of growth, but many investors may wonder if Webjet can continue to outperform Flight Centre considering the huge returns it delivered in 2015.

Here is a quick overview of each company and what investors could expect over the next 12 months:

Webjet Limited (ASX: WEB)

Webject operates in two distinctive travel markets – consumer travel (Webjet and Zuji) and wholesale hotel management (Lots of Hotels and Sunhotels). It is through the second division that Webjet is looking to expand its geographic footprint and the initial signs look promising with the company expecting this segment to grow at triple the rate of its consumer travel division over the next five years.

Although many investors had questioned Webjet’s ability to compete in a crowded online marketplace, it has actually strengthened its position as the most popular online travel agent in Australia over the last year. The graph below shows just how dominant the company has become in the Australian market and leads me to believe Webjet could become the subject of a takeover from a much larger competitor such as Expedia in the not-too-distant future.

Source: Company Presentation

Source: Company Presentation

Regardless of whether a takeover eventuates, FY16 is still looking very promising for Webjet with earnings expected to increase by around 20%. All divisions have shown strong growth in total transaction value (TTV) so far and although the shares are trading at a premium to the broader market, I believe they could trade higher throughout the course of the year if consumer confidence strengthens and Webjet delivers on its guidance.

Flight Centre Travel Group Ltd (ASX: FLT)

Unlike Webjet, Flight Centre operates both as an online travel agent and through traditional bricks-and-mortar stores. Although this increases the company’s operating costs, it also provides a distinguishing factor from online only agents and is especially useful for travellers with complicated travel plans.

Like Webjet, however, Flight Centre is also rapidly expanding into overseas markets. The company operates in ten regions globally and has also recently made a number of new acquisitions that will potentially boost future earnings growth as it enters new travel categories including charters and the youth market.

FY15 was a disappointing year for Flight Centre with underlying earnings falling by 3.4%, blamed primarily on poor consumer confidence in Australia and higher-than-expected investment costs. Despite this, the company still showed excellent growth in many of its international markets and these markets are expected to make a larger contribution to earnings growth over the medium term.

Flight Centre is forecasting underlying growth of between 4%-8% in FY16 which is well below its long-term trend as it transitions through a difficult period. Although the short-term growth outlook is somewhat subdued, the company is in an extremely strong financial position with little debt and a cash balance well in excess of $500 million. The company has already shown it is willing to put its massive cash balance to work with a number of recent acquisitions.

Flight Centre has an extremely capable management team and a track record of delivering great returns for shareholders. As a result, I wouldn’t be writing the company off just yet and actually believe the current share price offers good value for long-term investors.

Flight Centre also offers a very stable dividend yield of more than 4% that is backed by the strength of its balance sheet.

Foolish takeaway

I would be comfortable owning either company at the moment but with earnings momentum moving in the right direction, it could be argued that Webjet offers a better value proposition despite its higher valuation. Whether it can outperform Flight Centre again in 2016 is unknown but the long-term outlook for both businesses appears quite positive.

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Motley Fool contributor Christopher Georges has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.