Skift Travel 200 Methodology

Why Does Travel Need a Stock Index?

The travel sector has seen a dramatic expansion of public companies over the last few years. It started when Airbnb came public in late 2020. What followed were so many public offerings, we called 2021 the year of the travel IPO. Frontier and Sun Country IPO’ed, while the SPAC boom brought Sonder, Inspirato, and Vacasa into the public market, among many others.

This is great news for our industry. The wide range of public companies speaks to Travel’s growing maturity and prominence within the broader business community. It creates a valuable level of standardization and transparency into the financial health of the travel industry. And it provides us with a critical read on investor sentiment vis-à-vis travel.

But even as the number of public travel companies has grown, there was still no major stock index that tracked the performance of the travel industry.

The major hurdle is that travel is not often viewed as a proper industry itself. The global industry classification standard (GICS), which slices and dices major stock indexes into 11 different buckets does not consider travel to be a standalone industry. Instead, the Airlines are shunted as a sub-sector under the broader category of “Industrials.” Hotel brands fall under “Consumer Discretionary,” but hotel owners likely end up as “Real Estate.” Meanwhile online travel agencies fall into the “Information Technology” industry.

None of these are wrong per se, Expedia is a tech company and a Marriott stay is a discretionary consumer purchase. But by scattering travel companies across half a dozen different industries it is hard to take a holistic pulse of the industry or to aggregate financial data in a meaningful way.

The goal of Skift Research’s Skift Travel 200 is to rectify this problem and to build a stock index designed for the travel industry from the ground up. You can think of the Skift Travel 200 as the S&P 500 for the travel industry. The index currently tracks 196 public companies in the travel sector from 34 countries divided into five travel sectors and 14 sub-sectors. The cumulative market capitalization of our travel index is over one trillion dollars. 

Market Weighting of the ST200

The Skift Travel 200 is built as a market capitalization weighted index. This is the industry standard methodology for stock indices. Each company in the index has a market value, also called a market capitalization, determined by stock market investors. A market cap is the equity value of each business calculated by taking the share price of each stock multiplied by total shares outstanding for each company.

In this kind of stock cap index each individual company is given a weight based on the relative size of its market value. The change in the price of the Skift Travel 200 is determined by adding up the change in each underlying constituent stock and then weighting those changes based on the relative size of each company. 

              Change in Index = ∑ Change in Stock * Weight of Stock

As a market capitalization weighted index, the larger a company is, the more of a ‘vote’ it has over what happens to the ST200. This means that Booking Holdings, with a market capitalization of $100+ Billion has more impact on the performance of the overall ST200 than Travelzoo with a market value of ~$90 million.

While this system is less ‘fair’ than an equal weighted average where every company has the same impact, we believe that this is a useful methodology. The reality is that larger companies tend to have more revenue and employees. And they also tend to be less volatile than smaller-cap peers. By using a market-weighted approach, the index is not skewed by a few smaller companies that may see large percentage changes in their value but which don’t have a large overall industry impact.

ST200 Sector Breakdown

SectorsMarket Capitalization ($M)Share of IndexNumber of Companies
Global Hotel Brands$156,44015%12
Alternative Accommodations$96,6229%6
Regional Hotel Brands$45,5204%17
Hotel REITs$45,2134%25
Hotel Management and Operations$21,0582%17
Time Shares$13,1761%4
Network Carriers$259,41024%32
Low Cost Carriers$90,5739%22
Other Airline Related$7,9531%6
Travel Tech$208,42720%21
Online Travel$162,20215%15
B2B Tech$46,2254%6
Cruise and Tours$78,4787%18
Cruise Lines$60,8536%4
Tour Operators$17,6252%14
Ground Transportation$38,2124%16

Source: Skift Research. Data as of 9/18/2023.

We subdivide the travel industry into five sectors: Accommodation, Airlines, Travel Tech, Cruise and Tours, and Ground Transportation. Each is further subdivided into sub-sectors of which there are 14 in total.

Accommodation is the largest sector within travel. We break it down into six subsectors: global hotel brands, regional hotel brands, hotel management and operations, hotel REITS, alternative accommodations, and time shares.

Airlines are nearly as big. We primarily divide this into two groups: network carriers, the largest single subsector, and low cost carriers. We also have a very minor group of other airline related companies.

Travel tech largely consists of online travel businesses like Expedia Group and Booking Holdings. Online travel is the third largest subsector behind network carriers and global hotel brands.  We classify Airbnb under alternative accommodations rather than online travel, though it could arguably fit in either location. The secondary travel tech subsector is B2B tech which includes global distribution systems, property management systems, corporate travel agencies, channel managers, and the like.

Cruise lines and tour operators are combined into one sector. Both share similarities in that they offer multi-day pre-packaged itineraries that combine multiple suppliers and destinations into one offering. Both are also commonly sold through third party distribution channels. The Cruise and Tours sector has relatively fewer public companies.

Ground transportation is our smallest sector. It is primarily made up of car rental companies and intercity bus lines. There were not enough public companies to divide this category into meaningful subsectors but if more companies in the space IPO or otherwise come to light we would look to revisit this classification.

Introducing the Index Divisor

The Skift Travel 200 is maintained via an index divisor. The divisor functions like the shares outstanding for a company. The market value of a company is determined by its share price multiplied by its shares outstanding. For a stock index, which doesn’t have any legal shares issued, market value is determined by index price multiplied by its divisors.

              Index Market Value = Index Price * Index Divisor

Stock Indices also face the issue of how to handle additions or removals of the underlying stocks that make up the index. Making a change to the stocks inside the index will change the market value of the index in a dramatic way but we don’t want those changes to affect the index price.

Take the example of Airbnb. The Skift Travel 200 starts in December 2018 but Airbnb only goes public in December 2020. Airbnb IPO’ed with a market value of ~$80B. At the time the total market cap of all other travel stocks was ~$810 billion. If we just added Airbnb without any adjustment then the market value of the travel index would increase to $890 billion. Even though travel stocks were flat that day, if we did nothing to control for adding ABNB, then the index would rise ~10% due to the extra market cap.

We want the index to always reflect the fundamental performance of underlying stocks and to hide the impact of back-end administrative changes. We solve this issue by adjusting the index divisor. The market cap formula can be rewritten as:

              Index Price = Market Value / Divisor

And because we know that we want the index price to stay the same when we add or remove any companies, we adjust the divisor to match the change in market value.

              (1) Old Index Price = New Index Price

              (2) Old Market Value / Old Divisor = Index Price = New Market Value / New Divisor

              (3) New Divisor = Old Divisor * New Market Value / Old Market Value

              (4) New Divisor = Old Divisor * Change in Market Value

In our example, when we add Airbnb the divisor goes up by 10% to match the 10% raise in market value. This works in reverse too, if a company gets taken private and removed from the index, we would adjust the divisor lower.

Quarterly Rebalancing

We update the Skift Travel 200 four times a year. Each quarter Skift Research decides if there are any new public travel companies that should be added to the index and any that should be removed. Every quarter we will recalculate a new divisor. This divisor captures changes in market value due to company changes as well as changes in market value due to the issuance of new shares or buybacks of shares from existing companies within the index.

We will always rebalance the index at the end of the quarter. But from time to time, we may also add extra divisor adjustments within a quarter to rebalance the index for a major merger, bankruptcy, or stock split.

Divisor-Adjusted Fundamental Data

One of the benefits of a travel-specific stock index is that we can aggregate fundamental company data, such as sales and profits, to understand how the industry is performing over time. However, changes to the index composition means we will run into the same issue with time series revenue data as we face with market values.

Just as aggregate market value will be subject to big swings by adding a new company, so too will aggregate revenues. Back to our Airbnb example, if we add that company in December 2020, it will throw off growth rates for revenue in the following quarter. That is because Q1 2021 sales will include Airbnb revenue, but Q1 2020 sales will not. That gives an unfair boost to revenue growth rates when we add a new company to the index in the prior quarter. This would work in reverse if we removed a company.

To adjust for this, just like we do for market value, we use the index divisor as a scalar. We divide aggregate revenue by the index divisor to get divisor-adjusted revenue. This is the equivalent of revenue per share for an individual company.

The drawback of this approach is that divisor-adjusted revenue is not in dollar units which can be confusing especially when we are used to thinking of revenue as a dollar figure. But the benefit is that divisor-adjusted revenue makes for more accurate growth rate comparisons over time.

Skift Travel 200 Stock Index line graph showing divisor-adjusted revenue growth comparisons.

We can see the difference between these two revenue measurements most clearly by looking at year-on-year growth rates. Airbnb is added in December 2020 so Q1 2021 sees a large divisor adjustment. This is also around the time of travel SPACs and IPOs — all adding aggregate market value and revenue which is causing the divisor to be adjusted upwards. Aggregate revenue grew by 134% in Q2 ’21 vs. Q2 ’20. But keep in mind that many of the companies included in that 2021 aggregate revenue figure were not part of the index in 2020, so they are artificially inflating this growth rate. The divisor-adjusted growth rate is 40 points lower at 92%. This is probably a more accurate read on the actual pace of top-line growth for the industry at that time. Still an impressive gain, but more realistic than what the aggregate figures would lead you to believe.

Skift Travel 200 Stock Index line graph showing revenue growth comparisons.

Throughout our reporting on the ST200 we will switch back and forth between these two measurements. For any static comparisons within a single quarter, for instance breaking down revenue by sector or comparing the travel industry with other industries, we will use aggregate revenue in dollars. But when making time series comparisons across quarters, we will use divisor-adjusted revenue.

ST200 Company Constituents

Below is a table with all the current constituents that make up the Skift Travel 200 and the corresponding sector and sub-sector we have assigned to that business.

SectorsCompany NameTickerMarket Cap ($M USD)
Global Hotel Brands$157,408
Marriott International, Inc.NasdaqGS:MAR$60,590
Hilton Worldwide Holdings Inc.NYSE:HLT$40,380
InterContinental Hotels Group PLCLSE:IHG$12,894
Hyatt Hotels CorporationNYSE:H$11,165
Accor SAENXTPA:AC$9,544
Choice Hotels International, Inc.NYSE:CHH$6,274
Wyndham Hotels & Resorts, Inc.NYSE:WH$6,273
Genting BerhadKLSE:GENTING$3,453
Mandarin Oriental International LimitedSGX:M04$2,098
NH Hotel Group, S.A.BME:NHH$1,936
Meliá Hotels International, S.A.BME:MEL$1,467
The Hongkong and Shanghai Hotels, LimitedSEHK:45$1,334
Regional Hotel Brands$47,885
H World Group LimitedNasdaqGS:HTHT$12,948
Whitbread plcLSE:WTB$8,808
The Indian Hotels Company LimitedNSEI:INDHOTEL$7,103
Shanghai Jin Jiang International Hotels Co., Ltd.SHSE:900934$5,277
Hotel Shilla Co.,LtdKOSE:A008770$2,552
Shangri-La Asia LimitedSEHK:69$2,421
Central Plaza Hotel Public Company LimitedSET:CENTEL$1,824
Lemon Tree Hotels LimitedNSEI:LEMONTREE$1,113
Huatian Hotel Group Co.,Ltd.SZSE:000428$783
Grupo Posadas, S.A.B. de C.V.BMV:POSADAS A$722
Scandic Hotels Group AB (publ)OM:SHOT$663
Jinling Hotel Corporation, Ltd.SHSE:601007$497
GreenTree Hospitality Group Ltd.NYSE:GHG$431
Stamford Land Corporation LtdSGX:H07$416
Regal Hotels International Holdings LimitedSEHK:78$317
Banyan Tree Holdings LimitedSGX:B58$255
Hotel Management and Operations$20,083
Minor International Public Company LimitedSET:MINT$4,975
BTG Hotels (Group) Co., Ltd.SHSE:600258$2,830
Pandox AB (publ)OM:PNDX B$2,004
Hotel Properties LimitedSGX:H15$1,446
Target Hospitality Corp.NasdaqCM:TH$1,417
Chalet Hotels LimitedNSEI:CHALET$1,387
Playa Hotels & Resorts N.V.NasdaqGS:PLYA$1,102
RLH Properties, S.A.B. de C.V.BMV:RLH A$1,045
Miramar Hotel and Investment Company, LimitedSEHK:71$946
Formosa International Hotels CorporationTWSE:2707$867
PPHE Hotel Group LimitedLSE:PPH$567
Hotel Grand Central LimitedSGX:H18$467
Bonvests Holdings LimitedSGX:B28$295
S Hotels and Resorts Public Company LimitedSET:SHR$280
Grupo Hotelero Santa Fe, S.A.B. de C.V.BMV:HOTEL *$170
Grupe, S.A.B. de C.V.BMV:CIDMEGA *$145
Paliburg Holdings LimitedSEHK:617$141
Hotel REITs$44,099
Host Hotels & Resorts, Inc.NasdaqGS:HST$11,813
Ryman Hospitality Properties, Inc.NYSE:RHP$5,085
Apple Hospitality REIT, Inc.NYSE:APLE$3,704
Park Hotels & Resorts Inc.NYSE:PK$2,828
Covivio HotelsENXTPA:COVH$2,798
Ascott Residence TrustSGX:HMN$2,717
Sunstone Hotel Investors, Inc.NYSE:SHO$1,931
Pebblebrook Hotel TrustNYSE:PEB$1,773
DiamondRock Hospitality CompanyNYSE:DRH$1,729
RLJ Lodging TrustNYSE:RLJ$1,564
Service Properties TrustNasdaqGS:SVC$1,322
Xenia Hotels & Resorts, Inc.NYSE:XHR$1,319
CDL Hospitality TrustsSGX:J85$968
Far East Hospitality TrustSGX:Q5T$917
Frasers Hospitality TrustSGX:ACV$714
Summit Hotel Properties, Inc.NYSE:INN$620
FibraHotelBMV:FIHO 12$497
Chatham Lodging TrustNYSE:CLDT$487
Hersha Hospitality TrustNYSE:HT$395
Regal Real Estate Investment TrustSEHK:1881$320
Braemar Hotels & Resorts Inc.NYSE:BHR$187
ARA US Hospitality TrustSGX:XZL$177
Century City International Holdings LimitedSEHK:355$101
Ashford Hospitality Trust, Inc.NYSE:AHT$99
Sotherly Hotels Inc.NasdaqGM:SOHO$34
Alternative Accommodations$93,088
Airbnb, Inc.NasdaqGS:ABNB$91,086
Soho House & CoNYSE:SHCO$1,396
Vacasa, Inc.NasdaqGS:VCSA$100
Sonder Holdings Inc.NasdaqGS:SOND$75
Inspirato IncorporatedNasdaqGM:ISPO$43
Time Shares$11,825
Hilton Grand Vacations Inc.NYSE:HGV$4,629
Marriott Vacations Worldwide CorporationNYSE:VAC$3,744
Travel + Leisure Co.NYSE:TNL$2,851
Bluegreen Vacations Holding CorporationNYSE:BVH$601
Network Carriers$238,616
Singapore Airlines LimitedSGX:C6L$25,909
Delta Air Lines, Inc.NYSE:DAL$25,548
Air China LimitedSEHK:753$16,659
United Airlines Holdings, Inc.NasdaqGS:UAL$14,989
China Southern Airlines Company LimitedSEHK:1055$14,142
China Eastern Airlines Corporation LimitedSHSE:600115$12,505
Türk Hava Yollari Anonim OrtakligiOTCPK:TKHV.Y$11,614
ANA Holdings Inc.OTCPK:ALNP.F$10,354
Deutsche Lufthansa AGXTRA:LHA$10,314
International Consolidated Airlines Group S.A.LSE:IAG$9,370
Japan Airlines Co., Ltd.OTCPK:JPNR.F$8,871
Hainan Airlines Holding Co., Ltd.SHSE:900945$8,848
American Airlines Group Inc.NasdaqGS:AAL$8,696
Cathay Pacific Airways LimitedSEHK:293$6,710
Korean Air Lines Co., Ltd.KOSE:A003490$6,282
Qantas Airways LimitedOTCPK:QUBS.F$6,256
LATAM Airlines Group S.A.SNSE:LTM$5,810
Air CanadaTSX:AC$5,391
EVA Airways Corp.TWSE:2618$5,133
Alaska Air Group, Inc.NYSE:ALK$5,022
Juneyao Airlines Co., LtdSHSE:603885$4,353
China Airlines, Ltd.TWSE:2610$4,219
Copa Holdings, S.A.NYSE:CPA$3,696
Air France-KLM SAENXTPA:AF$3,471
Vietnam Airlines JSCHOSE:HVN$1,164
Bangkok Airways Public Company LimitedSET:BA$970
Finnair OyjHLSE:FIA1S$811
Asiana Airlines, Inc.KOSE:A020560$609
Hawaiian Holdings, Inc.NasdaqGS:HA$410
El Al Israel Airlines Ltd.TASE:ELAL$213
SAS AB (publ)OM:SAS$200
Jet Airways (India) LimitedNSEI:JETAIRWAYS$76
Low Cost Carriers$98,661
Ryanair Holdings plcNasdaqGS:RYAA.Y$20,216
Southwest Airlines Co.NYSE:LUV$17,684
InterGlobe Aviation LimitedNSEI:INDIGO$11,142
Gol Linhas Aéreas Inteligentes S.A.NYSE:GOL$8,403
Spring Airlines Co., Ltd.SHSE:601021$7,518
easyJet plcLSE:EZJ$4,174
Wizz Air Holdings PlcLSE:WIZZ$2,640
VietJet Aviation Joint Stock CompanyHOSE:VJC$2,206
Spirit Airlines, Inc.NYSE:SAVE$1,797
JetBlue Airways CorporationNasdaqGS:JBLU$1,656
Allegiant Travel CompanyNasdaqGS:ALGT$1,525
China Express Airlines Co.,LTDSZSE:002928$1,346
Frontier Group Holdings, Inc.NasdaqGS:ULCC$1,223
Controladora Vuela Compañía de Aviación, S.A.B. de C.V.BMV:VOLAR A$1,055
Azul S.A.NYSE:AZUL$967
Sun Country Airlines Holdings, Inc.NasdaqGS:SNCY$815
Norwegian Air Shuttle ASAOB:NAS$806
Jeju Air Co., Ltd.KOSE:A089590$668
Jin Air Co., Ltd.KOSE:A272450$485
SpiceJet LimitedBSE:500285$313
Air Busan Co., Ltd.KOSE:A298690$254
Norse Atlantic ASAOB:NORSE$148
Copa Holdings, S.A.NYSE:CPA$3,696
Air France-KLM SAENXTPA:AF$3,471
Vietnam Airlines JSCHOSE:HVN$1,164
Bangkok Airways Public Company LimitedSET:BA$970
Finnair OyjHLSE:FIA1S$811
Asiana Airlines, Inc.KOSE:A020560$609
Hawaiian Holdings, Inc.NasdaqGS:HA$410
El Al Israel Airlines Ltd.TASE:ELAL$213
SAS AB (publ)OM:SAS$200
Jet Airways (India) LimitedNSEI:JETAIRWAYS$76
Other Airline Related$7,047
Joby Aviation, Inc.NYSE:JOBY$4,537
SkyWest, Inc.NasdaqGS:SKYW$1,803
Chorus Aviation Inc.TSX:CHR$360
Blade Air Mobility, Inc.NasdaqCM:BLDE$216
Wheels Up Experience Inc.NYSE:UP$80
Mesa Air Group, Inc.NasdaqGS:MESA$50
Travel Tech$208,184
Online Travel$167,073
Booking Holdings Inc.NasdaqGS:BKNG$112,793 Group LimitedNasdaqGS:TCOM$23,203
Expedia Group, Inc.NasdaqGS:EXPE$15,327
Tongcheng Travel Holdings LimitedSEHK:780$5,063
MakeMyTrip LimitedNasdaqGS:MMYT$4,089
Tripadvisor, Inc.NasdaqGS:TRIP$2,205
Webjet LimitedOTCPK:WEBJ.F$1,680
eDreams ODIGEO S.A.BME:EDR$852, Corp.NYSE:DESP$498
trivago N.V.NasdaqGS:TRVG$383 N.V.SWX:LMN$295
On the Beach Group plcLSE:OTB$246
Hostelworld Group plcLSE:HSW$193
Yatra Online, Inc.NasdaqCM:YTRA$157
B2B Tech$41,110
Amadeus IT Group, S.A.BME:AMS$30,128
Beijing Shiji Information Technology Co., Ltd.SZSE:002153$4,385
Global Business Travel Group, Inc.NYSE:GBTG$2,693
Corporate Travel Management LimitedOTCPK:CTML.F$1,626
Sabre CorporationNasdaqGS:SABR$1,535
RateGain Travel Technologies LimitedNSEI:RATEGAIN$743
Cruise and Tours$68,230
Cruise Lines$51,750
Royal Caribbean Cruises Ltd.NYSE:RCL$24,956
Carnival Corporation & plcNYSE:CCL$19,042
Norwegian Cruise Line Holdings Ltd.NYSE:NCLH$7,330
Lindblad Expeditions Holdings, Inc.NasdaqCM:LIND$421
Tour Operators$16,480
Jet2 plcAIM:JET2$2,955
Flight Centre Travel Group LimitedOTCPK:FGET.F$2,813
China Travel International Investment Hong Kong LimitedSEHK:308$1,089
Huangshan Tourism Development Co.,Ltd.SHSE:600054$1,083
Guangzhou Lingnan Group Holdings Company LimitedSZSE:000524$914
Yunnan Tourism Co., Ltd.SZSE:002059$895
Lotte Tour Development Co., Ltd.KOSE:A032350$845
Emei Shan Tourism Co.,LtdSZSE:000888$802
Xi’an Qujiang Cultural Tourism Co., Ltd.SHSE:600706$701
Hanatour Service Inc.KOSE:A039130$569
Voyageurs du Monde SAENXTPA:ALVDM$529
Rainbow Tours S.A.WSE:RBW$136
Transat A.T. Inc.TSX:TRZ$121
Ground Transportation$36,523
Localiza Rent a Car S.A.BOVESPA:RENT3$13,074
Avis Budget Group, Inc.NasdaqGS:CAR$7,691
Hertz Global Holdings, Inc.NasdaqGS:HTZ$5,017
ComfortDelGro Corporation LimitedSGX:C52$2,034
FirstGroup plcLSE:FGP$1,301
Movida Participações S.A.BOVESPA:MOVI3$894
LOTTE rental co.,ltd.KOSE:A089860$757
Theeb Rent A Car CompanySASE:4261$742
Mobico Group PlcLSE:MCG$665
Transport International Holdings LimitedSEHK:62$617
Saudi Public Transport CompanySASE:4040$568
Hubei Three Gorges Tourism Group Co., Ltd.SZSE:002627$558
SK Rent A Car Co., LtdKOSE:A068400$411
PT Blue Bird TbkIDX:BIRD$324
Jiangxi Changyun Co., Ltd.SHSE:600561$227

Source: Skift Research. Data as of 9/18/2023.