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Pandemic Recovery: Have BEACH Stocks Bounced Back?

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BEACH stocks market cap recovery

Pandemic Recovery: Have BEACH Stocks Bounced Back?

The travel and entertainment industries have had a volatile ride over the last year.

During the initial stages of the pandemic, when panic and uncertainty ran rife, BEACH stocks–booking, entertainment, airlines, cruises, and hotels—were left scrambling. Collectively, $332 billion in market cap washed away.

Now, it appears the tide might be turning for these companies, buoyed by vaccine breakthroughs and glimmers of hope for a return to normalcy.

This infographic looks at the growth in market cap value across BEACH stocks one year from when the WHO officially declared COVID-19 a pandemic.

Washing Back to Shore?

BEACH stocks have gained a collective $376 billion in market cap in the year since the pandemic was declared, with about half the companies trading at their respective all-time highs.

In fact, about 70% of BEACH stocks have actually outperformed the S&P 500, which returned 43.7% during the same period.

CompanyTickerCategoryMarket Cap: 03/11/20 ($B)Market Cap: 03/11/21 ($B)Change
American AirlinesAALAirlines7.214.296%
Southwest AirlinesLUVAirlines23.534.446%
Alaska Air GroupALKAirlines5.78.142%
United AirlinesUALAirlines13.017.233%
Air CanadaACAirlines5.97.933%
Delta Air LinesDALAirlines29.130.96%
Expedia GroupEXPEBooking12.024.6105%
Allegiant TravelALGTBooking2.04.198%
Booking HoldingsBKNGBooking64.096.051%
Caesars EntertainmentCZRCasino & Hotel2.220.8824%
Norwegian Cruise LinesNCLHCruise & Casino4.310.9151%
Royal Caribbean CruisesRCLCruise & Casino10.822.4108%
CarnivalCCLCruise & Casino16.431.893%
Penn National GamingPENNEntertainment & Live Events2.620.4661%
Six FlagsSIXEntertainment & Live Events1.74.1142%
Live NationLYVEntertainment & Live Events10.819.379%
The Walt Disney CoDISEntertainment & Live Events201.2357.177%
Cedar FairFUNEntertainment & Live Events1.82.857%
HiltonHLTHotels25.034.638%
Marriott InternationalMARHotels35.648.235%
Choice Hotels InternationalCHHHotels4.55.930%
Hyatt HotelsHHotels6.78.729%
Marriott Vacations WorldwideVACHotels & Resorts3.87.7103%
Vail ResortsMTNHotels & Resorts7.113.488%
Park Hotels & ResortsPKHotels & Resorts3.45.358%
Wyndham Hotels & ResortsWHHotels & Resorts4.26.451%
MGM Resorts InternationalMGMResorts & Casino10.219.389%
Wynn ResortsWYNNResorts & Casino9.715.964%
Las Vegas SandsLVSResorts & Casino40.748.218%

BEACH Stocks Leaders and Laggards

When dissecting this basket of stocks by industry, it’s clear that much of the recovery story is lopsided. One reason for this, despite the pandemic, is that there are more granular, idiosyncratic trends occurring within these sectors.

Let’s look at what’s propelling the leaders, and dragging down the laggards:

Leading: Online Betting

There’s reason to be bullish on gambling stocks. Since late 2018, some 20 states have legalized sports betting, with more expecting to follow. Relative to other areas, the pandemic has been kind to gambling stocks. Many of those with an online presence have witnessed a spike in traffic, as more people continue to flock towards online betting.

Within the BEACH stocks basket, Penn National Gaming and Caesars Entertainment are clear outliers, having grown an epic 661% and 823% respectively. In addition, the broader industry (measured by the BETZ ETF) has nearly doubled the performance of the S&P 500 since its inception.

Laggard: Airlines

The return to normalcy will be much more delayed for airlines. Global RPKs, an industry metric, are not expected to reach pre-pandemic levels until 2024.

Actions of insiders also seem to match this negative sentiment. Warren Buffett, once a staunch supporter of airlines, decided to call it quits during the pandemic—dumping his entire position.

Airline COVID RPKs

U.S. airline executives have collectively been selling their stakes much more aggressively than in the last few years. To add insult to injury, there’s significant shorting of airline stocks as well. At a short interest of 11.6%, American Airlines is most heavily shorted BEACH stock.

Laggard: Hotels

In a year where social interactions and gatherings have largely disappeared, so too has much of the business activity for hotels. For instance, Hilton sales suffered a 58% decline year-over-year.

But even without the pandemic, the hotel industry had their work cut out for them, through a growing and formidable competitor in Airbnb. Airbnb can scale its network beyond what any hotel can. This is evident in its room count, which is greater than the largest hotels combined.

Airbnb room count vs hotels

More Bumps On The Road Ahead?

The investing landscape today looks to be disconnected from reality, in part because of the forward-looking nature of markets. Even though things are dire today, there’s a belief that light exists at the end of the tunnel.

But the path to recovery isn’t quite so linear. When the dust settles, it’ll become more apparent which industries will “return to normal” and which have set out permanently on a new trajectory.

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Markets

The Growth of a $1,000 Equity Investment, by Stock Market

In this graphic, we’ve visualized stock market growth by country over the past five years using major indices.

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Visualizing Stock Market Growth by Country

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

In this graphic, we show the change in value of a $1,000 investment in various leading equity indexes from around the world. This data was sourced from Investing.com, and covers a five-year period from April 2019 to April 2024.

See the following table for the five-year annual return figures of the indexes shown above.

Index5-Yr Return
as of April 1, 2024
🇮🇳 NIFTY 5092.4%
🇯🇵 Nikkei 22572.5%
🇺🇸 S&P 50070.9%
🇨🇦 S&P/TSX Composite31.0%
🇬🇧 FTSE 1009.8%
🇭🇰 Hang Seng-40.2%

In terms of stock market growth by country, India (represented here by the NIFTY 50) has impressively surpassed both the U.S. and Japan.

What is the NIFTY 50?

The NIFTY 50 is an index of the 50 largest and most actively traded Indian stocks. Similar to the S&P 500, it represents a range of industries and acts as a benchmark for investors to gauge the performance of the country’s broader stock market.

What’s Going on in India?

India’s multi-year bull market has led to several records being shattered in 2023. For example, the country’s total stock market market capitalization surpassed $4 trillion for the first time, while India-focused ETFs pulled in net inflows of $8.6 billion over the year.

A primary driver of this growth is the country’s fast-rising middle class. According to a report by Morgan Stanley, this “once-in-a-generation shift” will result in India having the third largest stock market globally by 2030, presumably behind the U.S. and China.

Japan Also Breaks Records

Japanese equities (represented in this graphic by the Nikkei 225) slightly outperformed the S&P 500 over the past five years. The index, which represents the top 225 companies on the Tokyo Stock Exchange, recently set a new record high for the first time since 1989.

Japanese companies have reported strong earnings as of late, partly thanks to a weak yen, which benefits many of the country’s export-reliant companies.

Learn More About Global Markets From Visual Capitalist

If you enjoyed this graphic, be sure to check out The World’s Biggest Stock Markets, by Country, which provides a unique perspective on country-level market capitalizations.

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Voronoi, the app by Visual Capitalist. Where data tells the story. Download on App Store or Google Play

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