Travel had the makings of the greatest short. With airline reservations having precipitous declines after President Trump announced his travel ban from certain Muslim majority countries, you had to figure that anything tourism would have plummeted in the first quarter.
We knew for a fact that bookings for everyone in the industry fell after the Jan. 27 and Mar. 6 executive orders, so why not bet against this $250 billion industry, especially when the experts were predicting declines of as much as $18 billion if the bans stayed in place for the next couple of years.
In a market starved for short selling ideas here at last was a terrific one that had saying power and would take you right through into April and May.
It only got better after the United Continental (UAL) drag-a-thon occurred, where you had to figure there would still be another leg down in the revenue per passenger mile of the airlines and the hotel reservations numbers, especially the ones in the big cities where the tourism decline had to be crushing.
Turns out though, it wasn't -- and the upshot is that those who did bet against travel and leisure are truly on the ropes after some sharply better-than-expected numbers.
Take just last night. First Marriott International (MAR) reported extremely robust numbers -- simply incredible, talking about how strong the U.S. and Europe are. It revealed that it had a pipeline of more than 400,000 rooms that it intends on building. That's hardly what you would do if you really thought that travel was going to be crimped by the ban.
Then United reported astonishingly strong revenue numbers, with traffic up 7% and lots of positive chatter about on-time planes -- which was a major factor behind the choice of Oscar Munoz as CEO not that long ago. The dragging incident didn't come into play, and the stock is up almost 10% since the aftermath. No, the conclusion shouldn't be more passengers should be pulled off the plane by their feet. The takeaway is that travel is so strong that even that most-watched incident meant nothing for the biggest villain of the era.
Some of this could have been predicted if you had paid close attention. I had the CEO of Expedia (EXPE) on last week in San Francisco, and he indicated that business was robust in the previous month. Wyndham Worldwide (WYN) reported extraordinarily good numbers and a robust forecast a few weeks ago. Marriott VacationWorldwide, the timeshare spinoff of Marriott, had similar comments.
Any one of these companies could have tipped you off to the notion that travel and leisure is robust. So could the numbers from MGM (MGM) for America, where business is amazingly strong both in Vegas and in National Harbor outside of D.C.
And of course, the cruise lines have all been delivering fantastic quarters, big beats and raises -- every one of them.
Now you could argue that all of this is just pent-up demand -- as travel did indeed drop after the bans. But what I think is happening is that people are spending on trips more than they are on goods. The money may just be coming out of retail. Remember travel is experiential, and experiential is something that can be put on your Facebook page. Retail? It's just a chore made easier by Amazon (AMZN) .
Cocktails & Cramer
Join Jim Cramer on May 23 for an exclusive party at Bar San Miguel, his Brooklyn tavern. You'll get to watch a screening of Mad Money, after which Jim will arrive fresh off of the CNBC set to mingle, pose for photos and answer your investing questions. Participants will enjoy dinner, drinks, an autographed copy of Jim's book, Get Rich Carefully, and a one-year membership to Action Alerts PLUS, Jim's club for investors. (Current AAP members will receive one extra year of membership for free.)
When: Tuesday, May 23, 6 p.m. - 9 p.m. ET
Where: Bar San Miguel, 307 Smith St., Brooklyn, N.Y.
Cost: $375 per person
Space is very limited, so click here to reserve your ticket to this exclusive event today.