- As the holiday season kicked off last week with stronger than expected jobs numbers and consumer spending, the ALPS Global Travel Beneficiaries ETF (JRNY) rose 3.28% and outpaced its competitors and broader global markets. Global travel continues to have its pulse on the state of the consumer with strong travel spending expected to persist into 2023, affirmed by Thanksgiving weekend seeing the highest foot traffic across US airports since the pandemic began, according to the US Transportation Security Administration.
- Online travel agency, Trip.com Group Ltd-ADR (TCOM US, 2.74% weight*), led JRNY’s diversified global travel holdings last week, soaring over 24% as the Shanghai company benefitted from renewed optimism regarding China’s potential reopening. The optimism amongst Chinese stocks in JRNY was widespread, as China’s government officials announced plans to speed up COVID-19 vaccinations for the elderly to reduce the economic pressure stemming from excessive COVID-19 restrictions. Tongcheng Travel Holdings (780 HK, 0.20% weight*), H World Group LTD (1179 HK, 0.67% weight*) and Galaxy Entertainment Group L (27 HK, 1.65% weight*) all rallied over 13% on the optimistic reopening news.
- Delivery management software company, Grab Holdings LTD (GRAB US, 0.54% weight*), was a top performer within JRNY’s Booking & Rental Agencies segment last week, rising nearly 7% on the completion of a repurchase of a $750 million term loan, removing the debt to shore-up its total debt load. Online travel agency, Booking Holdings Inc. (BKNG US, 4.63% weight*), also gained over 5% on the week, moving higher on expectations of a positive European Commission review of the company’s planned takeover of global travel agency, eTraveli.
- Significant news announcements also drove a number of Global Travel Beneficiaries segment names higher last week, highlighted by technology solution provider, Sabre Corp (SABR US, 0.22% weight*), jumping 16.70% last week after the S&P 600 Small Cap Index announced that Sabre was slated to join the index. Additionally, Estee Lauder Companies Inc. (EL US, 4.12% weight*) rallied nearly 9% last week on the potential easing of COVID-19 restrictions across China, where the company’s premium beauty products are poised to see a pick-up in sales volumes and better margins with less global trade impediments.
"There's no doubt, the prices (travel) are a lot higher than they used to be. And we talk about the average daily rate at a hotel for us. And we talked about that it's 28% higher in the constant currency, looking around the world at different currency changes. That's a big increase. Yet people are still buying it."
– Glenn Fogel, Booking Holdings President & CEO, November 30, 2022
Pent Up Demand Is Butting Heads with an Economic Slowdown
- Despite widespread global inflation, consumers have yet to materially pull back on overall spending. A rise in wages, lower unemployment across developed markets and lower gas prices over the month of November may have provided the jolt global travel spending needed through the holidays, thwarting recessionary trends. Adobe Analytics reported US consumers shelled out a record $11.3 billion on Cyber Monday (and a spending rise of +5.8% from last year)**. In the face of global central banks continuing to hike interest rates to curb inflation, the resiliency of the global consumer has been remarkable as unemployment across developed and emerging economies remains near record lows.
- Global travel and leisure spending’s key indicators have also provided recent optimistic data points. Nevada (Las Vegas) gaming revenues surpassed COVID-19 levels by a shocking +20% in October, while Chinese gambling hub, Macau, received a bullish note from JPMorgan, stating they expect “up to 50% additional capacity” of casinos and hotels to drive a return to pre-COVID-19 earnings by 2024. Furthermore, global air traffic and flights booked are expected to continue to increase as the International Air Transportation Association reported total airport traffic spiked +44.6% year-over-year in October of 2022.
- Per Bloomberg, global scheduled flights are 3x that of the pandemic lows, with the week of Thanksgiving in 2022 recording over 605,000 flights, globally.
- Unlike many competitor ETFs that focus solely on the US, JRNY’s global exposure is meant to capture the increasing travel trends in developed and emerging markets with diversification across various travel segments and beneficiaries.
* Weight in JRNY as of 12/02/2022
** Source: Adobe Analytics, as of 11/30/2022
Performance Summary
| 1 Week | YTD | SI1 | |
| ALPS Global Travel Beneficiaries ETF (JRNY) | 3.28% | -15.13% | -15.35% |
| S-Network Global Travel Index - NTR | 3.14% | -14.76% | -14.67% |
| Morningstar Global Markets Index - NR | 1.36% | -14.71% | -12.99% |
Source: Bloomberg L.P., as of 12/02/2022
Performance data quoted represents past performance. Past performance is no guarantee of future results so that shares, when redeemed, may be worth more or less than their original cost. The investment return and principal value will fluctuate. Current performance may be higher or lower than the performance quoted. For current month-end performance call 1-866-759-5679 or visit www.alpsfunds.com. Performance includes reinvested distributions and capital gains.
For standardized performance please click here.
1 Fund inception date: 09/08/2021
Top 10 Holdings
| LVMH Moet Hennessy Louis Vuitton SE | 5.00% | Cintas Corp | 4.43% | |
| L'Oreal SA | 4.75% | American Express Co | 4.38% | |
| Booking Holdings Inc | 4.63% | Estee Lauder Cos Inc/The | 4.12% | |
| Hilton Worldwide Holdings Inc | 4.47% | Walt Disney Co/The | 3.79% | |
| Marriott International Inc/MD | 4.45% | Airbnb Inc | 3.64% |
As of 12/02/2022, subject to change
Important Disclosures & Definitions
An investor should consider the investment objectives, risks, charges and expenses carefully before investing. To obtain a prospectus containing this and other information, call 1-866-759-5679 or visit www.alpsfunds.com. Read the prospectus carefully before investing.
Shares are not individually redeemable. Investors buy and sell shares on a secondary market. Only market makers or “authorized participants” may trade directly with the Fund, typically in blocks of 5,000, 25,000 or 50,000 shares.
Performance data quoted represents past performance. Past performance is no guarantee of future results; current performance may be higher or lower than performance quoted.
All investments are subject to risks, including the loss of money and the possible loss of the entire principal amount invested. Additional information regarding the risks of this investment is available in the prospectus.
The Fund is new and has limited operating history.
Diversification does not eliminate the risk of experiencing investment losses.
The Fund is subject to investment and operational risks associated with the travel industry. Companies engaged in the travel industry may be adversely affected by a downturn in economic conditions that can result in decreased demand for travel. These companies may be significantly impacted by the performance of the overall economy, changing consumer tastes and demands, consumer discretionary income levels, intense competition, technological developments, and government regulation. Additionally, uncertainty regarding international travel and other events such as political or social violence, terrorist attacks, and biological outbreaks may significantly impact the travel and vacation industry.
The Fund employs a “passive management” - or indexing - investment approach and seeks investment results that correspond (before fees and expenses) generally to the performance of its underlying index. Unlike many investment companies, the Fund is not “actively” managed. Therefore, it would not necessarily sell or buy a security unless that security is removed from or added to the underlying index, respectively.
Morningstar Global Markets Index: measures the performance of the stocks located in the developed and emerging countries across the world. Stocks in the index are weighted by their float capital, which removes corporate cross ownership, government holdings and other locked-in shares.
S-Network Global Travel Index: a rules-based methodology developed by S-Network Global Indexes Inc., which is designed to identify exchange-traded stocks of companies that are materially engaged in the global travel industry, including four segments: Airlines & Airport Services; Hotels, Casinos, Cruise Lines; Booking & Rental Agencies; and Ancillary Beneficiaries, which is based on the research of the Index Provider.
One may not invest directly in an index.
ALPS Advisors, Inc. is affiliated with ALPS Portfolio Solutions Distributor, Inc.
ALPS Portfolio Solutions Distributor, Inc. is the distributor for the Fund.
Not FDIC Insured • No Bank Guarantee • May Lose Value
TVL000149 03/06/2023
