Travel and tourism remain an important cornerstone of the Australian economy. Two small-cap ASX travel shares that have had a rough 12 months have been Kelsian Group Ltd (ASX: KLS) and Helloworld Travel Ltd (ASX: HLO).
However they could be significantly undervalued.
On Tuesday, the latest data for overseas arrivals and departures will be released by the ABS.
However already this year there has been an uptick in these numbers – positive news for domestic tourism operators.
Lets look at these two travel companies that could be poised to benefit.
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Kelsian Group Ltd (ASX: KLS)
Kelsian operates public and private transport and tourism services across Australia, the US, Singapore, London, and the Channel Islands.
It provides commuter transport for resource, corporate, and education sectors, along with marine and tourism services including cruises, accommodation, and holiday packages.
Its share price has fallen 23.25% over the last 12 months, and closed last week at $3.83 per share.
Despite a difficult 12 months, broker Bell Potter has a target price of $4.65 on the travel stock. This indicates an upside of 21.42%.
In a report earlier this year, the broker noted domestic tourism faced headwinds, whilst international sectors have upside.
The management assured that the impacts seen in the business are likely temporary, with expectations for recovery in numbers particularly in the U.S. market.
Helloworld Travel Ltd (ASX: HLO)
Australian-based travel distribution company Helloworld Travel is another small-cap ASX travel share. It consists of a wide array of travel brands across three key pillars of its business: retail, wholesale, and inbound.
As well as its extensive and diversified travel operations in Australia and New Zealand, Helloworld has a significant business presence in Fiji.
Its share price fell 35.65% over the last year, but now may be a buy-low option.
Broker Bell Potter currently has a "buy" recommendation and price target of $2.40.
This represents a potential upside of approximately 57% from the current price of $1.52.
Elsewhere, online brokerage platform Selfwealth also sees upside in the ASX travel share.
It has an average price target of $2.33.
Trading View has a one year price target of $2.34.
The company also offers an attractive dividend yield of more than 9%.
