The recession caused businesses of all types to batten down the hatches.
Companies associated with the travel and entertainment industry were hit particularly hard as Americans had little appetite to travel for either business or for pleasure.
However, things will improve. These travel and entertainment companies, at least the more formidable of them, will come back and enjoy bountiful profits.
What makes me such an optimist?
Americans work hard and play hard. History has proven that they like to spend a lot of money. And so, as the economy improves, I think that hotels, airlines, cruise lines, and similar companies will flourish and that their bottom lines are likely to swell.
Which companies in particular look the most attractive or deserve a little closer inspection?
Cruise lines like Carnival (NYSE:CCL) and Royal Caribbean (NYSE:RCL) should see a big boost in demand as consumers loosen their purse strings and begin once again to explore and enjoy the Caribbean and similar destinations.
Hotel chains are another area of interest for me. In the lodging business, Marriott (NYSE:MAR), with its broad reach, physically attractive properties and competitive prices for guests, strikes my fancy maybe the most. InterContinental Hotel Group (NYSE:IHG), known for its InterContinental and Holiday Inn brands, is another organization with large potential earnings power in time.
While airlines like Continental (NYSE:CAL) and Delta (NYSE:DAL) may indeed see increased demand for tickets and ultimately see higher revenue pour in, that business doesn't excite me nearly as much.
The government tends to impose all kinds of burdensome restrictions on airline companies. There are a number of other hard-to-predict variables like air fares and fuel costs that can hurt the outlook of the airline industry in a short period of time.
Instead, Boeing (NYSE:BA), which makes commercial aircraft, is of far greater interest and, at least in my opinion, is more attractive. That company, thanks to its market position in commercial aircraft coupled with its military experience, leaves it extremely well positioned to generate money for its shareholders.
This economy has indeed been put through the wringer.
However, I think the economy will bounce back. Americans work hard and have a habit of playing particularly hard.
Entertainment and travel companies are positioned to benefit financially.
About the Author: Glenn Curtis
In the mid-1990s, Glenn Curtis worked as an equity analyst for a regional broker in New Jersey. From there he worked for several high-profile print and Web publications, primarily as a financial writer providing both stock market commentary and educational content. He has previously held his series 6,7,24 and 63 licenses. Click Here
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