Consumer spending faces multiple headwinds in 2022. Even after we factor in rising interest rates, the highest inflation since the late 1980s and a slowing global economy, the largest war in Europe for 80 years further adds to the weight on consumer confidence. 
But there are bright spots for investors to focus on. Some sectors of consumer and business spending stand out, offering continued structural growth in demand despite the aforementioned headwinds to demand. 
One such case is travel spending. Both business and leisure travel were curtailed dramatically in 2020 in the face of the Covid-19 pandemic and neither has recovered to anything like demand levels seen in 2019. While most areas of business and consumer spending have seen strong demand recoveries, the continued Covid-19 restrictions around the world on travel has meant the global travel recovery never really showed up. 
After more than two years, though, the industry is set for a dramatic rebound. Pent-up demand is a difficult thing to measure, but we think all readers would agree that with respect to travel, it is certainly there!
Early predictions of the end of business travel, replaced by Zoom meetings, were premature. Most airlines now are predicting business travel, when allowed to return, to recover to levels above 2019 demand very quickly as clients and suppliers rush to reconnect.
Where allowed, leisure travel is already rebounding strongly too. 
Meanwhile the newfound ability to work remotely is actually encouraging moretravel. Many are choosing to temporarily live in different cities and countries while they work, increasing demand for temporary accommodation, flights, etc.
Stocks in the sector are already reporting very strong results too, indicative of the strong rebound ahead.
The broader business and leisure travel industry is a good example of why, even in volatile markets, opportunities remain for investors to invest in, particularly those investors with active mandates. While indexes and broad market ETFs may remain under pressure, specific sectors and companies with unique characteristics and valuations continue to offer exciting opportunities to invest.
Travel was, before the pandemic, a structural growth industry, and we expect that to be the case again post-pandemic. This is a sector Dominion has been rebuilding investment positions in since 2021 in anticipation of the full post-covid recovery. Aircraft leasing companies, online booking platforms, hotel operators, these and many other businesses with exposure to this recovery in travel spend are likely to continue to stand out in 2022 and 2023.

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