The hospitality sector is expecting a strong recovery in 2025, which could present attractive opportunities for investors. As global travel restrictions caused by disease and geopolitical tensions continue to ease and pent-up demand for leisure and business travel surges, the sector is expected to see healthy growth. For investors looking to capitalize on this trend, exchange-traded funds (ETFs) offer a diversified and efficient investment vehicle. These funds provide exposure to a wide range of hospitality businesses, including airlines, hotels, cruise lines, online travel agencies and entertainment venues. By investing in a hospitality ETF, investors can potentially take advantage of the expected recovery in tourism while reducing risk through diversification.
Understanding Hospitality ETFs
Exchange-traded funds are baskets of securities that trade as individual stocks on an exchange. They offer investors the opportunity to invest in a diversified portfolio of assets through a single transaction. ETFs are known for their liquidity, transparency, and relatively low expense ratios compared to actively managed mutual funds.
Hospitality ETFs focus on companies in the travel and leisure industries. These funds provide investors with targeted information on sector performance, allowing them to benefit from overall industry growth. They achieve this by tracking an underlying index and using a passive management approach.
A technological approach to travel
Strengthen the Travel Tech ETF today
Amplify Travel Tech ETF
As of 01/03/2025 16:38 Eastern
- 52 week range
- $17.13
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US$22.92
- Dividend yield
- 0.12%
- Assets under management
- US$60.00 million
Amplify ETFMG Travel Tech ETF NEWSIRKA: Away offers a unique approach to investing in the hospitality sector, focusing on the intersection of travel and technology. Launched on February 12, 2020 and managed by Amplify Investments LLC with Toroso Investments, LLC as sub-adviser, AWAY tracks the Prime Travel Technology Index NTR. The index includes global travel booking, ride sharing, price comparison and travel advisory companies. The fund’s investment strategy emphasizes the role of technology in enhancing the travel experience, making it an attractive option for investors who believe in the transformative power of technology in the hospitality industry.
Amplify Travel Tech ETF (AWAY) price chart for Saturday, January 4, 2025.
The fund’s assets range from established online booking platforms to innovative ride-hailing services. This diversity speaks to the fund’s strategy of investing in companies that use technology to improve the travel experience and are poised to benefit from the overall growth of the travel industry. The fund has an expense ratio of 0.75% and had $60.31 million in assets under management (AUM) as of January 1, 2025. AWAY’s results reflect the inherent volatility and significant growth potential of the travel technology sector.
Main field of activity in the hospitality industry
Defiance Hotel, Airlines and Cruise ETFs Today
Defiance Hotel, Airlines and Cruise ETF
As of 01/03/2025 17:39 Eastern
- 52 week range
- US$18.91
▼
$28.20
- Dividend yield
- 0.08%
- Assets under management
- $28.17 million
Defiance Hotels, Airlines and Cruises ETF NYSEARCA: CRUZ offers investors a more traditional route into the hospitality sector by focusing on its core components: airlines, hotels and cruise lines. Launched on June 3, 2021 and managed by Defiance ETFs, LLC with Penserra Capital Management LLC as sub-adviser, CRUZ tracks the BlueStar Global Hotels, Airlines and Cruises Index. This index includes companies that derive at least 50% of their revenue from these critical tourism segments. CRUZ’s strategy is aimed at investors seeking exposure to established players, providing a combination of growth and stability through exposure to industry giants.
Defiance Hotel, Airline and Cruise ETF (CRUZ) price chart for Saturday, January 4, 2025.
With an expense ratio of 0.45%, CRUZ is a cost-effective option for investors. As of January 1, 2025, the fund had $28.39 million in assets. The fund’s 2023 annual return of 35.30% highlights its ability to deliver strong results, while its 2024 annual return was around +25%. These figures indicate that CRUZ is responding effectively to rising travel demand. The fund has an aggregate rating of Moderate Buy with a consensus price target of $26.36, indicating analysts see some potential for further growth.
Away against CRUZ: two ways to rebound
AWAY and CRUZ offer investors two different ways to capitalize on the expected recovery in the hospitality industry, each with its own set of potential risks and rewards. AWAY’s focus on travel technology represents a bet on the transformative power of innovation in changing the travel landscape. Its portfolio, focused on companies at the forefront of digital booking, ride-sharing and other travel technology solutions, offers potential for high growth but also inherent volatility. The rapid pace of technological change means that companies in this space could experience a significant boost as new technologies gain traction. However, they also face the risk of new, more advanced solutions or changing consumer preferences.
CRUZ, on the other hand, takes a more grounded approach based on the established pillars of the hospitality industry: airlines, hotels and cruise lines. This strategy provides a degree of stability as these companies typically have established brands, a loyal customer base, and proven business models. While their growth trajectory may be more gradual than their technology-focused peers, they are well positioned to benefit from a broad recovery in travel demand.
Weighing options in a resurgent market
The expected resurgence of the hospitality sector in 2025 offers investors an attractive opportunity, and ETFs provide a versatile vehicle to capitalize on this potential growth. AWAY and CRUZ, with their different strategies, offer unique entry points into this dynamic market. AWAY provides access to the latest travel technology, attracting those who believe in continued innovation in the sector. In contrast, CRUZ offers a more sustainable course based on the time-tested fundamentals of airlines, hotels and cruise lines.
As the travel industry continues to evolve, investors should weigh the potential risks and rewards associated with each ETF. While past performance provides valuable information, it is not a guarantee of future results. Factors such as technological advances, changing consumer preferences and global economic conditions will undoubtedly determine the trajectory of these funds. The development of the travel sector in 2025 promises to be interesting, and these ETFs are at the forefront of the unfolding story.
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