Australian companies in the travel sector benefit from huge – and growing – domestic demand. For decades, the percentage of the population making at least one overseas trip each year has been increasing.
Today, about 30% of the Australian population makes an overseas trip each year, and the percentage is expected to rise to an astounding. 50% by 2016-2017, according to a 2012 IBISWorld study. The same study pegged the domestic tourism market as already worth $100 billion.
The best ASX travel stocks
With tailwinds like these, some of the best ASX travel companies have posted phenomenal growth, and strong share performance, in recent years.
Just in the last 12 months, shares of Flight Centre (ASX: FLT), Wotif.com (ASX: WTF), Webjet (ASX: WEB) and Corporate Travel Management (ASX: CTD) have all outperformed the overall market, as measured by the S&P/ASX 200 index (Index: ^AXJO) (ASX: XJO). In fact, shares of both Flight Centre and Corporate Travel Management have doubled during this period.
Spotlight on Flight Centre and Corporate Travel Management
If you're looking to build your long-term wealth in ASX shares – or fund your own overseas trip – shares of these companies could be a good bet. For example, relatively recent listing Corporate Travel Management, which provides business travel services to over a dozen ASX 100 companies, has seen profits grow from $3.3 million in 2010 to $12.9 in the last twelve months and the company has recently completed the acquisition of U.S. corporate travel agency TravelCorp. The acquisition is expected to begin contributing to results in 2014.
Flight Centre, for its part, is continuing with its own international expansion, and management recently saying that full-year profits before tax would come in at the top end of guidance – which would represent 17% year-over-year growth – or even slightly above guidance.
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Motley Fool writer/analyst Catherine Baab-Muguira does not own shares of any company mentioned here.
