As the US economic recovery from the Covid-19 pandemic gathers pace, we expect the travel and leisure sectors there to continue to benefit from economic re-openings and a pick-up in vaccinations. These sectors bore the brunt of the sell-off in 2020 and while they have partially recovered, we expect further momentum. Pent-up demand, growing consumer confidence, healthy consumer balance sheets, historically elevated savings, and the boost from fiscal stimulus should collectively see consumers make up for lost spending during lockdowns.
As such, we expect a substantial increase in discretionary spending, and one of the biggest beneficiaries to be travel and leisure. Given the delayed economic recovery in Europe and uneven vaccine rollout globally, we expect rotation into ex-US travel and leisure investments to increase but at varying rates in the second half of the year.
Bryan Besecker, vice president, investment strategist in the Global Investment Strategy team, BNY Mellon Investment Management.
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