SiteMinder (ASX: SDR) & Webjet (ASX: WEB) lead tourism stocks higher
Travel stocks received a boost overnight after the Australian Government softened its travel advice for several Middle Eastern countries, including Qatar, the UAE, Bahrain and Kuwait, lowering the warning level from “Do Not Travel” to “Reconsider Your Need to Travel”.
The standout of the session was SiteMinder (ASX: SDR) which soared ~13%, with the firm receiving ~41% of its revenue from EMEA (Europe, Middle East & Africa).
B2B travel company Web Travel (WEB) who receives a whopping 48% of its revenue from Dubai wasn’t far behind gaining more than +10%.
The change is also a positive for Flight Centre (FLT), which had previously highlighted the travel advisory as a headwind to bookings. Under the previous classification, many travellers risked losing insurance coverage even when simply transiting through major Middle Eastern hubs such as Doha and Dubai, creating an additional barrier to international travel.
The sector sentiment was also helped by the market’s reaction to a downgrade by the above-mentioned Flight Centre (ASX: FLT).
- FLT downgraded earnings by ~9% due to the US-Iran conflict, as opposed to a deterioration in the underlying business.
- They also announced a $200mn buyback as is so often the way when a company downgrades these days.
FLT was lagging the sector trading up +5%, not bad after a downgrade which saw the stocks start down ~5%.
