With increasing affluence in Asia, travel has become a more popular activity for many. This is further supported by the rise of low cost airlines, which makes travelling more affordable. Although investors may be worried about the impact of trade frictions, the tourism industry within China and the rest of Asia is expected to remain strong.
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Investors with a long term view should not be too concerned about short term fluctuations in the market and take the opportunity to buy stocks during times of market uncertainty. Here are 3 companies that provide investors with exposure to the tourism industry.
1. Beijing Capital International Airport Co Ltd
As the name implies, Beijing Capital International Airport Co Ltd (694.HK) operates the Beijing Capital Airport. As at the end of last year, over 100 airlines operate commercial flights at the airport. The airport is the gateway for passengers travelling to and from Beijing and will benefit from increased tourism.
Even though Beijing’s new Daxing International Airport will draw away some travellers from Beijing Capital Airport, the decline in revenues is expected to be short term. The fact that a new airport is needed in Beijing is testament to Beijing’s ability to attract visitors.
2. China Southern Airlines
One may recall that China Southern Airlines (600029.SH, 1055.HK) announced earlier this year that it aims to become the world’s largest carrier within the next three years. It is already the largest carrier in Asia. The airline carried more than 140 million passengers last year and flew more than 840 passenger and cargo planes.
Just in August this year, one of China Southern Airlines’ hub airports which is Guangzhou Baiyun International Airport surpassed Hong Kong International Airport in terms of the number of monthly passengers. This appears to be a trend that can contribute positively to China Southern Airlines.
3. Samsonite International S.A.
Samsonite International S.A. (1910.HK) is the world’s largest maker of travel luggage. The company designs, manufactures and distributes luggage, business bags, and travel accessories. Samsonite has a portfolio of well-known brands including Tumi and American Tourister.
The increasing numbers of tourists will drive demand growth for luggage makers. As perhaps the most recognisable luggage brand, Samsonite is expected to be one of the largest beneficiaries. Over the years, Samsonite has also broadened its portfolio of brands through acquisitions.