UBS sees both tailwinds and headwinds for Aussie travel cos

SiteMinder

24/01/2023 03:15

** Brokerage UBS sees caution for travel companies at
CY23/24 due to global recession fears, but views the reopening
of Chinese borders a major positive for the industry
    ** Adds that outlook for travel as of Dec 2022 is "less bad"
    ** Bringing back Chinese tourism and airline capacity into
market is key to getting back to pre-COVID levels - UBS
    ** Says it estimates China's outbound travel traffic could
return to 45% of 2019 level in 2023 and 90% of 2019 levels in
2024 
    ** However, the broker flags that weaker economic conditions
in Europe and the U.S. could pose a threat to travel demand; and
it doesn't expect outbound travel in China to recover until 2Q23
    ** In Australia and New Zealand, the broker also mentions
that recovery in leisure stocks could be more complicated due to
changed business models, labour headwinds and reduction of
international communications
    ** UBS maintains "Buy" rated on Webjet  WEB.AX , Corporate
Travel Management  CTD.AX  and Siteminder  SDR.AX ; stays
"Neutral" on Flight Centre Travel  FLT.AX  
    ** Broker reduces earnings per share estimate on CTD, FLT,
WEB and SDR to reflect softer business confidence in FY23-25
 (Reporting by Archishma Iyer in Bengaluru)
 ((Archishma.Iyer@thomsonreuters.com;))