The hospitality sector expects a strong recovery in 2025, which may provide compelling opportunities for investors. As global travel restrictions caused by the disease and geopolitical tensions continue to ease and pent-up demand for leisure and business travel increases, the sector expects healthy growth. For investors seeking to capitalize on this trend, exchange-traded funds (ETFs) provide a diversified and effective investment vehicle. These funds provide exposure to a wide range of companies in the hospitality sector, including airlines, hotels, cruise lines, online travel agencies and entertainment venues. By investing in hospitality ETFs, investors can capture the upside of the expected travel rebound while mitigating risk through diversification.
Understanding Hospitality ETFs
Exchange-traded funds are baskets of securities that trade like individual stocks on a stock exchange. They provide investors with a way 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 sector ETFs focus on companies in the travel and entertainment industry. These funds provide investors with targeted exposure to sector performance, allowing them to benefit from the overall growth of the industry. They achieve this by tracking the underlying index and using a passive management approach.
A technology-focused approach to travel
Amplify Travel Tech ETF today
Amplify Travel Tech ETF
As of 03/01/2025 at 04:38 PM ET
- 52 week range
- $17.13
▼
$22.92
- Dividend yield
- 0.12%
- Assets under management
- $60.00 million
Amplify ETFMG Travel Tech ETF NYSEARCA: Away Offers a unique approach to investing in the hospitality sector by focusing on the intersection between travel and technology. Launched on February 12, 2020, AWAY is managed by Amplify Investments LLC, with Toroso Investments, LLC as sub-adviser, and tracks the Prime Travel Technology Index NTR. This index includes global companies operating in the field of travel reservations, ride sharing, price comparison and travel advice. 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 Sunday, January 5, 2025
The fund’s holdings are diverse, from online booking platforms to innovative passenger transportation services. This diversity speaks to the fund’s strategy of investing in companies that leverage technology to enhance the travel experience and are also poised to benefit from the overall growth of the travel industry. The fund has an expense ratio of 0.75% and, as of January 1, 2025, had $60.31 million in assets under management (AUM). AWAY’s performance reflects the inherent volatility and significant growth potential of the travel technology sector.
Exposure to basic hospitality
Defiance Hotel, Airline, and Cruise ETF Today
Defiance Hotel, Airline, and Cruise ETF
As of 03/01/2025 at 05:39 PM ET
- 52 week range
- $18.91
▼
$28.20
- Dividend yield
- 0.08%
- Assets under management
- $28.17 million
Defiance Hotel, Airline, and Cruise ETF NYSEARCA: cruise It offers investors a more traditional path into the hospitality sector, focusing on its core components: airlines, hotels and cruise lines. Launched on June 3, 2021, CRUZ is managed by Defiance ETFs, LLC, with Penserra Capital Management LLC as sub-adviser, and tracks the BlueStar Global Hotels, Airlines and Cruises Index. This index consists of companies that derive at least 50% of their revenue from these core travel sectors. The CRUZ strategy caters to investors seeking exposure to established players, providing a combination of growth and stability through holdings in industry giants.
Defiance Hotel, Airline, and Cruise ETF (CRUZ) price chart for Sunday, January 5, 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 under management. The fund’s 2023 annual return of 35.30% confirms its ability to achieve strong results, while its one-year performance for 2024 is around +25%. These numbers indicate that Cruise is effectively capturing the return of travel demand. The fund carries an overall rating of Moderate Buy, with a consensus price target of $26.36, suggesting analysts see some potential for further growth.
AWAY vs. CRUZ: Two paths to recovery
AWAY and CRUZ offer investors two distinct paths toward capitalizing on the anticipated recovery in the hospitality sector, each carrying its own set of risks and potential rewards. AWAY’s focus on travel technology is a bet on the transformative power of innovation to reshape the travel landscape. Its portfolio, which is concentrated in companies at the forefront of digital bookings, ride-sharing, and other technology-enabled travel solutions, provides exposure to potentially high growth but also to inherent volatility. The rapid pace of technological change means that companies in this field can see a significant upside as new technologies gain traction. However, they also face the risk of disruption due to newer, more advanced solutions or changing consumer preferences.
In contrast, Cruise offers a more established approach that builds on the established foundation of the hospitality industry: airlines, hotels and cruise lines. This strategy provides a degree of stability, as these companies typically have well-established brands, loyal customer bases, and proven business models. While its growth path may be more gradual than that of its technology-focused peers, it is well positioned to benefit from a broad recovery in travel demand.
Weighing options in the renewable market
The expected recovery of the hospitality sector in 2025 presents investors with a compelling opportunity, and ETFs provide a versatile tool to capitalize on this potential growth. AWAY and CRUZ, with their distinct strategies, provide unique entry points into this dynamic market. AWAY provides access to the latest travel technology, attracting those who believe in continuous innovation in the sector. In contrast, Cruise offers a more established itinerary based on the time-tested foundations of airlines, hotels and cruise lines.
As the travel landscape continues to evolve, investors should evaluate the potential risks and rewards associated with each ETF. While past performance provides valuable insights, it is not a guarantee of future results. There is no doubt that factors such as technological advances, changing consumer preferences, and global economic conditions will shape the path of these funds. The travel sector’s journey in 2025 promises to be an interesting one, and these ETFs provide a front-row seat to the unfolding narrative.
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