Summer may be peak holiday season, but for investors in Europe’s travel companies it is autumn that tends to bring sunnier returns. New analysis by IG, a global trading platform, suggests that October to December has historically been the strongest quarter for the sector, with travel stocks outperforming the broader market by a wide margin.
Looking back at data from 2005 to 2024, IG compiled a basket of ten listed European travel firms, ranging from airlines IAG LON:IAG, Ryanair [LON:0RYA] and easyJet, to cruise operator Carnival [LON:CCL] and hotel group Whitbread LON:WTB. The results suggest that while these businesses enjoy their busiest operational months in summer, share prices have not consistently rewarded investors during that period. Between June and August, the basket of stocks returned an average of -0.89 per cent, underperforming the FTSE 350 (-0.04 per cent) and Stoxx 600 (-0.03 per cent).
Come autumn, however, the picture changes. From October to December the same group of travel stocks delivered average gains of 3.32 per cent, more than triple the returns of the FTSE 350 (0.97 per cent) and Stoxx 600 (0.90 per cent). Seasonal weakness appears to give way to renewed optimism as companies report results, update on bookings and offer guidance for the following year.
The trend is particularly clear in some individual stocks. EasyJet LON:EZJ, for instance, averaged a 4.55 per cent gain in the fourth quarter, despite losing 0.90 per cent over the summer months. Lufthansa [DE:LHA] shows a similar pattern, with an average Q4 increase of 4.16 per cent following a summer decline of 1.75 per cent. TUI [LON:TUI] also fits the bill, typically slipping by 2.54 per cent in summer but recovering with a 2.95 per cent rise in autumn. Investors appear reluctant to price in strong holiday demand until they see confirmation in earnings reports.
Wizz Air is a notable outlier
Wizz Air LON:WIZZ is the notable outlier. With only eight years of data, it nevertheless bucked the summer doldrums by posting average gains of 0.68 per cent between June and August. But even Wizz, whose model has relied on expansion into central and eastern Europe, peaked in the final quarter, averaging 4.81 per cent — the highest of any company in IG’s basket.
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The pattern reflects a broader truth about equity markets: timing matters less for consumers than it does for shareholders. Travellers may book flights in July, but investors appear to wait until the autumn for clarity. Chris Beauchamp, IG’s chief market analyst, said: “It’s natural for investors to think that summer is a good time to look at travel stocks, but the data tells a different story. Markets usually respond in autumn, when companies release results and update on future bookings, giving investors the clearest picture and historically the strongest returns.”
For retail investors, the implication is less about day trading and more about expectations. Travel remains a cyclical industry, highly exposed to consumer confidence, fuel costs and currency moves. But those willing to stomach the volatility may find that autumn presents a more rewarding entry point. At the very least, the seasonality of the sector offers a small consolation for those mourning the end of summer holidays.
