Investing in travel stocks could pay off on vacation
Some perks may not add up if struggling company winds up in your portfolio
Here’s a little-known fact: People who hold as little as a single share of certain travel companies are entitled to instant perks that far outvalue the price of their investment.
Think of it as an alternate version of a loyalty program, one in which you follow the Warren Buffett philosophy of buying in to the companies that you love. With Royal Caribbean Cruises, that has lately cost around $109 a share; with Meliá Hotels International it’s been easily under $10. That nominal purchase can unlock a world of benefits, ranging from $1,000 shipboard credits on certain cruises to instant silver status.
Investments aren’t normally made for the sake of kickbacks or perks, and indeed, this is a time when making larger investments in travel companies may come with considerable risk. As with all things, not all shareholder perks programs are equally valuable — and some are not a good deal at all.
Hotels
Accor SA, the largest hotel company in Europe, offers instant elite status to anyone who holds just 50 bearer shares, or one registered share, which has recently traded around $35.
That’s a small price to pay for gold status, which usually requires staying at the company’s hotels for 30 nights during a calendar year. The status can be valuable: It confers room upgrades, late checkout times and welcome gifts for guests at any of Accor’s hotels — the company’s 53 brands include legacy stalwarts such as Fairmont, Sofitel and Raffles.
The only other major hotel company that has a program like this is InterContinental Hotels Group PLC, which offers eligible shareholders a 20% discount on “flexible” room rates. That option, however, comes with a far steeper buy-in — it’s only available to those who own at least 100 shares of the company, and the stock price has been around $80 — making it less recommendable.
Cruise lines
Three cruise lines have similar programs: Carnival Corp., Norwegian Cruise Line Holdings Ltd. and Royal Caribbean Cruises Ltd. For each, the benefits kick in by holding 100 shares, and what you get varies based on the length of your cruise; in most cases, it would take repeat cruising, ideally on longer itineraries, for the perks to outvalue the stock purchase.
Airlines
Shareholder perks are less common among airlines, and generally nonexistent among U.S. carriers; Bloomberg Intelligence aviation analyst Tim Bacchus says one (rare) opportunity for finding them is when an airline undergoes an initial public offering, pointing to AirAsia X as a somewhat recent example. More long-term deals can be found among international aviation brands. Japan residents, for instance, can take advantage of shareholder deals with each of the country’s two largest carriers, ANA Holdings Inc and Japan Airlines Co Ltd.
Both airlines offer the same deal: 50% off vouchers for domestic flights with the purchase of at least 100 stock shares. The more stock you own, the more vouchers you earn.