June 21, 2021
Man is sitting on a plane and scrolling on his phone.
Global US investors
More than 2.1 million people boarded scheduled flights in the US on Sunday, an improvement of 160% from the beginning of the year. Vacation travel is mostly back as California and New York reopen their economies and the European Union (EU) officially adds the US to its list of entry-free countries.
It is therefore appropriate that the US Global Jets UCITS ETF (JETS) launched last week on the London Stock Exchange (LSE), giving UK and European investors access to the global aviation industry. I am pleased to announce that US Global Investors has expanded its product line to international markets for the second time this year. The first case was in April when our airline ETF debuted on the Mexican Stock Exchange (BMV).
The offer comes thanks to our partnership with HANetf, Europe’s first independent full-service provider of UCITS or undertakings for collective investments in securities. UCITS can be registered in Europe and offered to investors across the EU. Once approved, they are exempt from regulation in the individual countries.
I am confident that the UCITS ETF will meet foreign investor demand for a product that is designed to mimic the global economic reopening.
Cautiously optimistic about business trips
In terms of reopening, the two big barriers continue to be Canada (more on that later) and business travel. The difference between the two is that we are seeing steady improvement in the latter – at least domestically.
A survey conducted this month among members of the Global Business Travel Association (GBTA) showed that domestic business travel is on the best way to recover. Forty percent of respondents said that business travel has resumed within the country their business is based in, while a third said that their business has either set a start date or is working towards a date. Only 18% said that their company “waits to see what happens”.
International business travel is a different story. Only 12% of respondents said business travel had resumed outside the country their business was based in, a sign that we still have a long way to go.
Companies plan summer to resume business travel
GBTA, US Global Investors
However, the reluctance of some companies to resume business travel – especially domestically – is inconsistent with results from another survey that shows the vast majority of workers are more than willing to take to the streets and get back in the air to rise.
According to the SAP Concur Global Business Travel Report 2021 released last week, a whopping 96% of global business travelers said they will be traveling again in the next 12 months. And for good reason: 80% said they were worried that the inability to travel could harm them not only professionally but also personally.
Companies ready to travel for business again
SAP Concur, Wakefield Research, USGI
As many of you reading this know, there is no substitute for meeting clients and colleagues in person and attending live professional meetings and events (PMEs). Zoom fatigue is real, more so for women than men. Companies from Google to WeWork are working to introduce accessible holographic technology for use in the office, but right now it’s expensive, and I suspect the “creepy” factor will lead to strong opposition.
Ohio State University: Low Risk at Meetings and Events
In addition, there is growing research showing that meeting people in person and attending live events are low risk if sensible precautions are taken. A new paper from a team of Ohio State University health scientists argues that a return to PMEs “is naturally possible in the current environment.” The team looked at a number of PMEs that took place during the pandemic and found that if they followed the safety precautions, they were not so-called super-spreader events.
“By setting standards to balance public health interventions with face-to-face meetings, PMEs can help bring about a return to social interactions and networking,” the researchers write, adding, “As more people are fully vaccinated, these risks are further reduced. ”
A good case study is the recent Bitcoin 2021 conference in Miami. An estimated 12,000 people from around the world attended. Some attendees reportedly tested positive for the virus, but the conference didn’t become the super-spreader event many feared.
Will Canada finally open its borders?
California and New York – the number one and three largest states by GDP – also lifted almost all restrictions last week, as the proportion of residents who received at least one dose of vaccine topped 70%.
This is extremely positive as both states were among the earliest and hardest hit by the virus.
Now is the time for the US-Canada border to reopen to non-essential travel. The border is the longest in the world at 5,525 miles, and for every month it stays closed, the US economy loses $ 1.5 billion in potential travel exports, according to the US Travel Association. That’s enough to support many thousands of American jobs.
The current restrictions, which have been in place since March 2020, were originally supposed to expire today, but have been extended for at least another month, guaranteeing travel and tourism another lost summer.
This decision is inconsistent with science. Reportedly, Canada shot past Israel in terms of the percentage of people who received at least one dose. If things are going so well, why hasn’t the border been reopened?
Canada leads in the proportion of people who received at least one dose of vaccine
Our world in data, USGI
With this in mind, Canada’s parliament continues to debate the controversial C-10 bill, which many fear would give the government the power to regulate the content Canadians post on social media.
I’ll have a lot more to say about travel trends later this week during a webcast with Connor O’Brien, CEO of O’Shares ETFs. Connor and I will discuss reopening the world economy and what that means for airlines and e-commerce. I look forward to it and hope that you will participate!
Sign up for the webcast which will take place on Thursday, June 24th at 11:00 AM EST from click here.
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