If you're considering adding ASX travel shares to your portfolio, it's worth taking a look at the latest travel data coming out of Australia.
Stocks like Webjet Ltd (ASX: WEB), Flight Centre Travel Group Ltd (ASX: FLT), and Corporate Travel Management Ltd (ASX: CTD) are on the investment map once again as international travel returns to form.
But what does Australia's current travel scene tell us about potential growth? Let's take a look.
July 2024 travel data: Encouraging rebound
The latest figures from the Australian Bureau of Statistics (ABS) for July 2024 show promising signs for ASX travel shares.
Short-term visitor arrivals jumped to 658,970, marking a 5.4% increase compared to the same time last year.
Meanwhile, short-term resident returns surged by 15% to 1.14 million.
In total, 1.93 million arrivals were recorded in July, up 10% from the previous year, as Australians returned to international travel and foreign visitors continued to arrive.
New Zealand remains Australia's largest source of visitors, accounting for 18% of all arrivals, followed by China and the USA.
While the numbers are still about 17% below pre-COVID levels, the steady recovery is a positive sign for ASX travel shares.
What does this mean for ASX travel shares?
The ABS' travel data comes at a time when brokers are bullish on companies in the sector.
Webjet shares are down more than 7% in the past month, but UBS analysts are bullish about the company's future.
Particularly in light of its proposed demerger of its business-to-business (B2B) from business-to-consumer (B2C) operations.
UBS believes this could unlock significant value, potentially triggering a re-rating of Webjet shares.
With a price target of $10.60, UBS valuation implies a potential upside of 42% for Webjet shares at the time of writing.
Meanwhile, Flight Centre is another ASX travel share gaining attention.
The company has been praised by Morgans for its FY 2024 performance. Analysts highlighted the "increase in its revenue margin to 11.4% vs 10.4%".
Morgans rates the ASX travel share a buy with with a price target of $25.35, implying a potential upside of 21%.
Corporate Travel Management is also liked by brokers right now. The company's pre-tax earnings grew 21% in FY24, while net profits climbed 22%.
However, despite these positive metrics, Corporate Travel Management shares have slipped, as the results came in below market expectations. They are down 11% in the past month.
Still, according to CommSec, the ASX travel share is rated a buy by the consensus of analyst estimates.
The chart below shows a comparison of these three shares for the year to date.
Foolish takeaway
The latest travel data from July 2024 paints a positive picture for ASX travel shares. It also provides unique insights into the trends of arrivals to and departures from the country.
Brokers are also bullish on stocks within the sector, with buy ratings on Webjet, Flight Centre and Corporate Travel Management.
Webjet shares have risen 8% in the past 12 months, Flight Centre shares have risen 5%, and Corporate Travel shares have fallen 35%.
