Travel and leisure stocks have taken quite a beating since the Government postponed the final step on its roadmap out of the pandemic.

The market got wind of the change before the official announcement and shares in the most affected areas have drifted lower ever since.

British Airways owner Intercontinental Airlines (IAG) and TUI (TUI) have taken the brunt of the selling as the Government continues to tamper with the travel rules, adding extra complexity and weakening consumer confidence while European governments have added restrictions for UK travellers on fears over the delta variant.

Cinema operator Cineworld (CINE) has also seen weakness even as the first blockbuster movies have made a comeback.

After postponing the May 2020 release of the ninth instalment of the Fast & Furious franchise, the F9 movie is now on release and is expected to create some excitement while Peter Rabbit 2: The Runaway and Disney’s Cruella have attracted good attendances since cinemas reopened.

Some of the weakness is no doubt related to the sector’s shares running ahead of the fundamentals with strong performances in the first few months of the year. For instance, Cineworld’s shares roughly doubled from the start of the year until mid-May.

Pent-up demand and increased savings made during lockdown are eventually expected to have a positive impact on the travel and leisure sector, assuming that all restrictions are removed as planned on 19 July.

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Issue Date: 30 Jun 2021