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Experiences Rule! Insync Fund Managers February 2023 The Experience Megatrend, of which travel is a component, is one of 16 in our portfolio. Borders have reopened and travel is at full throttle. Growth rates in this industry are through the roof as the industry powers ahead from the COVID-19 pandemic. An individual's desire to travel is hardwired into human DNA. The rapid speed with which the recovery is occurring can be seen from the chart on the right; this is before China's reopening has its likely large impact.
Whilst airlines and cruise ships may be the more obvious ways to invest in this megatrend, they come with high levels of financial and operational risk. Companies like Qantas have had to raise capital every time there is a crisis. Their long-term performance has never reached our minimum quality hurdles. Our work has identified online travel agents are best positioned to deliver some of the highest and most consistent levels of profitability in this megatrend. No capital raisings were required, despite the shutdown in travel because of their exceptionally strong balance sheets. As we move into an environment where the use of digital apps to efficiently build travel itineraries accelerates (including researching, booking, and paying), investing in online travel agents should provide one of the highest quality ways to participate in the resurgence and secular growth in travel. Funds operated by this manager: Insync Global Capital Aware Fund, Insync Global Quality Equity Fund Disclaimer |
