Investing based on megatrends is risky. The trend’s power and accompanying hype can seduce novice investors who extrapolate growth too far into the future. Or forget that the market factored the trend into share prices long before the media spotted it.
This danger lurks in travel and tourism stocks. The boom in Asian tourism to Australia should run for years, as another 3.1 billion people join the middle class by 2030, on OECD estimates. That means more volume at Australian airports, hotels, casinos and tourist attractions.
I have written about this inbound tourism boom several times for The Switzer Report over the past three years, nominating Sydney Airport, Mantra Group, The Star Entertainment Group and Sea Link Travel Group as key winners from the trend.