- Trainline building on its strong position
- Hostelworld's novel twist to corner niche market
Online travel agencies (OTAs) enjoyed a big re-opening comeback after Covid, so there is a question mark as to how much value remains on the table for investors. Rather than look at the generalists, we're delving into the world of two niche operators: one selling train tickets, increasingly across national boundaries, and the other beds for young travellers and backpackers. Both stocks offer rates of growth in the next two years above the likely market average, exhibit a good quality of earnings and both have positive macro tailwinds. Valuation levels are becoming an issue for prospective investors, however.
Trainline (TRN) has a leading position in the already deregulated UK market for rail travel and is building a growing position in key European markets as the monopolies of former nationalised operators come under strain. This liberalisation of networks, greater cross border journeys and widespread policy drives to discourage car and plane journeys all play to Trainline’s advantage. However, TRN is trading on something more akin to a technology stock rating.
