Investors have seen recoveries in airlines, hotels and other travel-related stocks over the past 75 days or so. The moves have been large enough that some investors may assume that the summer travel season and the continued recovery for the rest of 2020 would create a mini-boom as the economy reopens. The problem with these assumptions is that the spending and activity forecasts for 2020 are dire. To add insult to injury, the recovery in 2021 and beyond may still fall short of prior levels.

A new study from the U.S. Travel Association (USTA) is predicting that total travel spending will be down a sharp 45% in 2020. The group is calling for continued federal measures to support the travel industry through this recession. Its study outlines just how dire the situation is now, even with the stimulus and support that has been offered so far.

While investors may overlook some of this data, 24/7 Wall St. has seen direct weakness in many of the key travel-related stocks. The major indexes were down only a small amount on Wednesday. While a study could have an impact on shares, and could of course be called coincidental, an obvious issue today is the continued rise in COVID-19 cases as states continue to reopen for business.

The current forecast predicts that domestic travel spending will fall by 40% in 2020. That would put the $972 billion spent in 2019 at a new level of $583 billion this year. International inbound travel spending was forecast to drop even worse, with a 75% decline taking the $155 billion in 2019 down to only $39 billion this year.

As for the frequency, the total domestic trips taken by U.S. residents were forecast to drop 30% from 2019 to just 1.6 billion trips. The USTA pointed out that this was the lowest figure since the recession back in 1991.

The long and short of the matter is that this trade group is signaling that the travel and tourism industry is being damaged more severely than any other domestic sector as the COVID-19 fallout continues. The group also identifies why this needs to be a national priority. Travel-related industries employ one in 10 Americans and were listed as second to U.S. exports pre-pandemic.

Among some of the requests being signaled to lawmakers are extending the Paycheck Protection Program eligibility, tax incentives (including a temporary travel tax credit), restoring business expensing around entertainment, lawsuit protection and a federal backstop in pandemic risk insurance.

One interesting aspect of the study was that business travel was projected to be down 35.1% in the number of trips, with a prior forecast in its tables showing a drop to 300 million trips from 462 million trips.

As far as why all this plays into the travel stocks, outside of the obvious financial damage in 2020, is that the forecast data goes out and covers 2021 through 2023. The U.S. Travel Association’s current forecasts not only show 2021 being weaker than the prior three years in general. What stands out is that even as the numbers recover in the later years, 2022 and 2023 are still expected to be weaker than what had been seen in 2019 and the prior two years. The massive recovery in the travel-related stocks may have gotten a bit ahead of the real industry’s own internal forecasts.

United Airlines Holdings Inc. (NYSE: UAL) was down 3.5% at $38.75 on Wednesday, in a 52-week range of $17.80 to $96.03. The retreat in the shares was even after Seaport Global issued a Buy rating and a $56 price target, and it also may have been the company’s policy of mandatory use of facial masks in the plan. United also has some creative financing on top of government help. American Airlines Group Inc. (NASDAQ: AAL), which was considered the weakest of the legacy carriers pre-bailout money, was down 3.2% at $16.47, and its 52-week range is $8.25 to $34.99. Seaport Global also started coverage of American Airlines with a Buy rating, with a $27 price target.

Sabre Corp. (NASDAQ: SABR) is perhaps the top technology solutions provider to the travel and tourism industries, and its shares were down 4.5% at $8.75 on no news. Sabre’s 52-week range is $3.30 to $25.44.

Online travel site operators were lower as well. Expedia Group Inc. (NASDAQ: EXPE) was down about 1% at $84.45 on Wednesday, and it has a 52-week range of $40.76 to $144.00. The much larger Booking Holdings Inc. (NASDAQ: BKNG) was down 2.25 at $1,637.00, and it has a 52-week range of $1,107.29 to $2,094.00.

Boeing Co. (NYSE: BA) probably would be preferred to be considered aerospace and defense, but all anyone cares about now is how it can or will sell any new jets. That may even matter more than the recertification of the 737 Max at this point. Boeing was down 2.5% at $192.75 a share, and its 52-week range is $89.00 to $391.00. It was above $400 in early 2019.

Hyatt Hotels Corp. (NYSE: H) had managed to get back to flat on the day at $56.63, but it was down close to $55 at the lows, and its 52-week range of $24.02 to $94.98 should spell out the issues. Marriott International Inc. (NYSE: MAR) traded down 1.9% at $92.10, in a 52-week range of $46.56 to $153.39.

Another obvious issue in travel has been the battered cruise lines. These figures were not prominent in the USTA study, but if travel spending is down (and with embarkation delays and suspensions), cruise operators are suffering deeply as well. Obviously, any continued COVID-19 spike jeopardizes cruise lines’ ability to reopen for business. Carnival Corp. (NYSE: CCL) already had extended some sailing dates, but its shares were down almost 5% at $19.40, and its 52-week range is $7.80 to $53.29.

Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) announced on Wednesday evening that it was extending the embarkation dates from August 1 through September 30 for its three cruise brands, with some exceptions, and that it would continue its work alongside the U.S. Centers for Disease Control and Prevention, the federal government and other health authorities. Norwegian Cruise Line shares were down 4.7% at $19.99. Royal Caribbean Cruises Ltd. (NYSE: RCL) was down 5.9% at $58.82, and its 52-week range is $19.25 to $135.32.

Avis Budget Group Inc. (NASDAQ: CAR) is not in bankruptcy protection like its top rival, but its shares were trading down 5% at $26.70. Its 52-week range is $6.35 to $52.98. Hertz Global Holdings Inc. (NYSE: HTZ) actually was halted on “news pending” on Wednesday, but it was previously trading at $1.94. That company is expected to be raising $500 million in new equity, although it has warned that the equity likely would be wiped out if it does not make debt payments in full and if pre-COVID conditions did not return fairly soon.

Las Vegas has been gradually reopening its casinos with new protective measures in place. Wynn Resorts Ltd. (NASDAQ: WYNN) traded down 1.3% at $89.30, and it has a 52-week range of $35.84 to $153.41. Las Vegas Sands Corp. (NYSE: LVS) was down just 0.4% at $49.20 on Wednesday, but it had been down more than 2% earlier in the trading session. It has a 52-week range of $33.30 to $74.29.

The rise of COVID-19 cases is the more damaging issue, but this USTA study used data prior to the rapid rise in COVID-19 cases, and it may act as a bellwether or barometer for just how dire the situation looks for the travel and tourism industry in 2020, even if the COVID-19 cases manage to flatten out.

Unfortunately, the trends for the great recovery in travel and tourism may not resemble what they used to for quite some time.

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