Yesterday, the Federal Government announced a $1.2 billion support package that includes around 800,000 half-price airline tickets.
News sites are reporting that the first round of travel vouchers in Victoria only lasted six minutes before allocations were exhausted at 10 am on Friday. A total of 40,000 vouchers were up for grabs, allowing Victorians to receive a $200 rebate after spending money on accommodation, attractions, and tours in regional Victoria.
Brokers have run the ruler with new share price updates regarding how this domestic tourism stimulus package could impact ASX travel shares.
Flight Centre Travel Group Ltd (ASX: FLT)
Citi retained its sell rating with a $16.80 target for the Flight Centre share price. The broker doesn't see much revenue upside from the stimulus package, noting that Australian domestic leisure accounts for approximately 9% of its pre-COVID-19 group total transaction value (TTV) and around 5% of the group's profit.
The Flight Centre share price rallied as much as 13% yesterday before closing 9% higher at $19.44. While its shares have given back some of its gains today, the Flight Centre share price is still around 5% higher since the news was announced.
Qantas Airways Limited (ASX: QAN)
Citi upgraded the Qantas share price from neutral to buy with a $6.14 target price. The broker believes that a leisure led recovery will have a negligible impact on Qantas revenues. But thinks that such a significant government investment will pressure state governments to keep borders open.
The Qantas share price has only nudged 1.50% higher since the stimulus package was announced.
Sydney Airport Holdings Pty Ltd (ASX: SYD)
Citi believes the domestic tourism stimulus package will have a limited revenue impact on the Sydney Airport share price. The broker notes that the package is largely focused on domestic travel and leisure routes, which were already experiencing a recovery.
Citi believes that the Sydney Airport share price will get a major re-rate when international travel restarts. However, the timing of this catalyst remains uncertain. The broker remains neutral rated with a $6.61 price target.
