This Memorial Day holiday weekend is poised to set a new benchmark in American travel history, fueled by lower gasoline prices, increased consumer confidence and a strong desire to reconnect with loved ones.

An increase in travel demand should boost revenues and profitability for the travel and tourism industry, thereby leading to higher share prices. Investors can tap this trend through ETFs that stand to profit big time from an upbeat Memorial Day travel trend. ETFMG Travel Tech ETF AWAY, AdvisorShares Hotel ETF BEDZ, Themes Airlines ETF AIRL, U.S. Global Jets ETF JETS and Invesco Dynamic Leisure and Entertainment ETF PEJ look like intriguing picks (see: all the Consumer Discretionary ETFs here).

Busy Travel Trends

According to AAA, about 45.1 million Americans will travel 50 miles (80 km) or more over the Memorial Day weekend (May 22-26), up 1.4 million from 2024. This would represent a new Memorial Day weekend record. Of them, more than 38 million are expected to hit the road, 3.6 million would fly, and 2.08 million would travel by train and other modes (including buses and cruises).

Road trips remain the dominant choice due to lower gasoline prices. Gasoline prices are projected to be among the lowest in recent decades for the holiday, providing both consumers and investors reasons to cheer. According to an analysis by GasBuddy, the average gallon of gas this Memorial Day weekend is expected to be around $3.08, down from $3.58 a year ago (read: Gasoline ETF in Focus Ahead of Memorial Day Travel).

Rental cars, particularly SUVs, are in high demand. According to AAA partner Hertz, May 23 will be the busiest day for pickups. Cities with the highest rental demand include Orlando, Denver, San Francisco, Las Vegas, Miami, and Seattle — all on AAA’s list of top destinations.

Airports are also gearing up for a busy weekend. Although not a record year for air travel (the 2005 peak remains at 3.64 million), this year’s numbers are 12% above pre-pandemic levels. Domestic flights are 2% more expensive than last year, averaging $850 for a round trip. Top destinations include Chicago, New York, Orlando, Denver and Seattle. Airlines are expecting a surge in passengers, with Orlando, Las Vegas, and Boston being top destinations.

Travel by other modes continues to climb post-pandemic. Cruise travel, particularly to Alaska, is booming. Fairbanks, Anchorage and Juneau are among the top cruise destinations this Memorial Day weekend.

ETFs Set to Surge

ETFMG Travel Tech ETF (AWAY)

ETFMG Travel Tech ETF is the first ETF that offers direct access to the technology-focused global travel and tourism industry. It follows the Prime Travel Technology Index, charging investors 75 bps in annual fees. ETFMG Travel Tech ETF holds 31 stocks in its basket, with American firms accounting for 36%, followed by 16% share in Australia and 13.8% in China. It has accumulated $50.9 million in its asset base and trades in an average daily volume of 11,000 shares.

AdvisorShares Hotel ETF (BEDZ)

AdvisorShares Hotel ETF is actively managed and provides exposure to the global hotel and travel-related services. It holds 26 stocks in its basket, with American firms accounting for about 91% share in the basket. AdvisorShares Hotel ETF charges 99 bps in annual fees and trades in an average daily volume of 1,000 shares. It has amassed $2.6 million in its asset base.

Themes Airlines ETF (AIRL)

Themes Airlines ETF offers exposure to the largest 28 airline companies by market capitalization by tracking the Solactive Airlines Index. American firms make up the largest share in the basket at 41.2%, followed by United Kingdom firms with a 15.1% share. Themes Airlines ETF has managed assets worth $0.9 million and charges 35 bps in annual fees. It trades in an average daily volume of under 500 shares.

U.S. Global Jets ETF (JETS)

U.S. Global Jets ETF provides exposure to the global airline industry, including airline operators and manufacturers from all over the world, by tracking the U.S. Global Jets Index. The product holds 50 securities, with American firms accounting for 76% of the assets, followed by Canada, Singapore and Spain. U.S. Global Jets ETF has gathered $829.8 million in its asset base while seeing a heavy trading volume of nearly 2 million shares a day. It charges investors 60 bps in annual fees and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook (read: Oil Slumps to Below $60: ETFs to Gain).

Invesco Dynamic Leisure and Entertainment ETF (PEJ)

Invesco Dynamic Leisure and Entertainment ETF offers exposure to companies that are principally engaged in the design, production or distribution of goods or services in the leisure and entertainment industries. It tracks the Dynamic Leisure and Entertainment Intellidex Index and holds 31 stocks in its basket. Invesco Dynamic Leisure and Entertainment ETF has amassed $326.7 million in its asset base and has 0.57% in expense ratio. PEJ trades in a paltry volume of 62,000 shares per day on average and has a Zacks ETF Rank #3 (Hold) with a High risk outlook.

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Amplify Travel Tech ETF (AWAY): ETF Research Reports

U.S. Global Jets ETF (JETS): ETF Research Reports

Invesco Leisure and Entertainment ETF (PEJ): ETF Research Reports

Themes Airlines ETF (AIRL): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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