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Why Corporate Travel & Flight Centre Travel Group Ltd just hit record highs

The global travel and tourism industry oscillates between boom and bust pretty readily, with inclement weather, political unrest and the buying power of our dollar all impacting on the decision making of corporate and personal travellers.

These two travel stocks might be competing for different slices of the travel sector pie, but they’re both going gangbusters at the moment, sitting on the S&P/ASX 200 52-week high list this week.

Corporate Travel Management Ltd (ASX: CTD)

A provider of travel management solutions for the corporate market, with presence across Australia, New Zealand, US and Asia, Corporate Travel Management has seen its share price track upwards to reach an all-time high when it opened at $26.20 today.

Shares in Corporate Travel Management are up 43% from the $18.04 share price at this time last year.

Corporate Travel released strong half-year results on February 21, recording unprecedented growth on both a local and global level with EBITDA up 32% on the previous corresponding period to $53.5 million.

Total transactions rose to $2.25 billion across the company’s global operations, up 21% from the previous corresponding period, with revenues rising 15% and an impressive 80% of all transactions by Corporate Travel customers now taking place online.

Internal automation and innovation has been high on the agenda for Corporate Travel, with customer win and retention rates at historically high levels and Europe the top-performing region by growth percentage – up a whopping 239%.

Corporate Travel weathered ticket price declines and negative foreign exchange rates in the last reporting period well, with difficulty highlighted in their Asia business as ticket declines negatively impacted supplier revenue.

But with plans to pursue acquisition opportunities, a large flow of developments scheduled in all regions and an overall strategy to increase market share, Corporate Travel looks on track to meet FY18 guidance and its share price is certainly looking healthy.

Flight Centre Travel Group Ltd (ASX: FLT)

Shares in travel agency business Flight Centre Travel Group Ltd were at $57.86 at the time of writing – an all-time high for the share.

Shares in Flight Centre have been tracking upwards steadily since this time last year, when the share price was almost 50% lower at $29.26.

It’s been all good news out of Flight Centre of late as the travel service provider upgraded profit forecasts when it released its half-year results on February 22, announcing a profit before tax of $139.4 million – up 23.2% on the previous corresponding period.

The figure was above guidance, with Flight Centre upwardly revising its FY18 profit expectations to “within reach” of their record-high underlying profit before tax of $376.5 million from 2014.

Flight Centre has named the effective execution of its global diversification strategy as behind the strong results, with vertical integration strategies including plans to move into travel “experiences” by way of tour guides to capture customer dollars beyond the travel agent desk.

Flight Centre shareholders will also be paid a record-high dividend of 60c per share.

Tourism and leisure brothers Ardent Leisure Group (ASX: AAD) and Crown Resorts Ltd (ASX: CWN) are also travelling along nicely, with Ardent Leisure opening up 2.8% today to $1.99 – up from $1.61 at this time last year.

Crown Resorts share prices were also at $13.80 at the time of writing after a mid-February slump which was quickly rectified by the release of half-year results which saw strong figures out of its Australian Resorts segment underpin a solid overall result.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited, Crown Resorts Limited, and Flight Centre Travel Group Limited. 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.

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