“Travel is coming back and we are laser-focused on preparing for the travel rebound,” said Airbnb CEO Brian Chesky in the company’s earnings release Thursday.
Expedia has been hurt by the pandemic, Klein noted. But he thinks the stock — which has lagged AIrbnb since December — has more room to run. VRBO has been gaining share on Airbnb when looking at search trends on Google for home rentals, he said, and that’s a good sign for Expedia.
Meanwhile, Expedia CEO Peter Kern said earlier this month that VRBO is the clear bright spot for the company right now. VRBO’s strength helped to boost the company’s overall revenue per room figures — a key metric for Expedia — in the latest quarter.
“Expedia has opportunistic managers and Diller is not someone to sit on his hands. It would not be shocking if Expedia tried to monetize the VRBO stake,” Klein said.
But Expedia will likely benefit even if it decides to keep VRBO within the corporate fold.
Brian Fitzgerald, an analyst with Wells Fargo, wrote in a recent report that he’s bullish on Expedia shares mainly because of “VRBO’s continued strength” and a view that “pent-up leisure travel demand…operational improvements and cost cuts should reward investors.”
Other travel related companies should rebound this year, too, analysts say.
“The vacation rentals category is likely to lead a broader lodgings recovery in 2021,” said Dan Thomas, senior analyst at Third Bridge, in a report this week. Although he noted that “the full-home vacation rental space is getting extremely competitive.”
Changebridge’s Klein also thinks more people might look to take long road trips this summer. That’s why he owns shares of LCI, a company that makes recreational vehicles and equipment for them.
“RVs are a safe way to get outside and can be an affordable trip for a family,” Klein said, adding that prices are strong thanks to surging demand and inventory shortages at dealerships.