Travel & Leisure: Beta, Multiples & WACC by Sector

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What the numbers say.

The travel and leisure sector has shifted a bit this month. It is valued notably higher than a month ago: the median EV/EBITDA rose to 6.4x while companies moved both ways, the beta held at 0.83, and the cost of capital stands at 8.4 %. The sector is more unsettled than in September: the choice of peers and settings moves the value more than it did.

EV/EBITDA is now the multiple to use

No multiple is clearly explained by the fundamentals this month; it is the multiple of the sector KPI, with a dispersion of 40 % across the 20 companies, and the companies are comparable in growth. EV/Sales spreads by 60 % because it carries the margin differences with it.

The beta to use: 5 years, monthly, 0.83

Among the stable settings it has the tightest spread across the 20 companies; R² 24 %, 17 of 20 betas significant, liquid group (median bid-ask spread 0.26 %). It is the smartZebra standard setting. The settings alone move the median beta from 0.36 to 0.83.

Both choices matter

Ten of the twenty companies move the EV/EBITDA median by −33 % to +21 %, the settings by up to 69 %. Travel and leisure sits in the handle-with-care corner of the map.

EBITDA margin is not what the market pays for this month

The usual yardsticks for travel and leisure: EBITDA margin and expected growth. EBITDA margin: rejected (rank correlation +0.35 with EV/EBITDA (NTM)). Expected growth: rejected (rank correlation −0.17 with EV/EBITDA (NTM)). No other key figure from the statements explains EV/EBITDA clearly either – the companies are priced on things the accounts do not show. Median EV/EBITDA (NTM) by sub-group: airlines 3.2x, hotels & travel 7.7x, gaming & leisure 7.8x.

EV/EBITDA (NTM): median 6.1x → 6.4x

10 more expensive · 7 cheaper

Jet2 fell most (−7 %), CTS Eventim rose most (+29 %).

{"m":[["Accor","10.8","10.7","±0%"],["Basic-Fit","9.8","9.7","−1%"],["Whitbread","8.4","8.8","+4%"],["CTS Eventim","6.1","7.9","+29%"],["SSP Group","7.8","7.8","±0%"],["Lottomatica Group S.p.a.","7.7","7.8","+1%"],["Meliá Hotels International","7.6","7.6","±0%"],["Wizz Air","6.4","6.6","+3%"],["Entain","6.1","6.5","+7%"],["Playtech","6.1","6.3","+3%"],["Hbx Group","5.0","5.3","+5%"],["easyJet","5.2","5.1","−1%"],["International Consolidated Airlines Group","3.9","3.9","−1%"],["Norwegian Air Shuttle","3.1","3.2","+2%"],["Air France-KLM","3.1","3.1","−1%"],["TUI","2.2","2.2","±0%"],["InterContinental Hotels Group","2.2","2.2","−2%"],["Jet2","1.0","0.9","−7%"]],"b":[["Jet2","3.75","3.83",70],["easyJet","1.64","1.66",85],["CTS Eventim","1.52","1.49",65],["Hbx Group","1.37","1.30",27],["International Consolidated Airlines Group","1.16","1.20",87],["Evolution","1.14","1.11",66],["Norwegian Air Shuttle","1.08","1.08",54],["Accor","0.92","0.93",79],["TUI","0.90","0.93",70],["Wizz Air","0.87","0.89",84],["InterContinental Hotels Group","0.79","0.76",78],["SSP Group","0.60","0.62",71],["Entain","0.61","0.58",63],["Playtech","0.73","0.57",50],["Betsson","0.39","0.45",52],["Whitbread","0.46","0.43",70],["Basic-Fit","0.38","0.37",44],["Meliá Hotels International","0.36","0.37",44],["Air France-KLM","0.32","0.34",51],["Lottomatica Group S.p.a.","0.02","0.02",15]],"w":["Lottomatica Group S.p.a.","Hbx Group","Basic-Fit","Meliá Hotels International","Playtech"]}

Beta (5 years, monthly): median 0.83 → 0.83

17 of 20 significant

Each line runs from last month’s beta (light dot) to this month’s (blue dot), on the same beta setting.

Do the usual yardsticks hold this month?

The usual yardsticks for travel and leisure, tested on the 20 companies this month.

EBITDA margin

Rejected

Rank correlation +0.35 with EV/EBITDA (NTM) · clear link from +0.60

Expected growth

Rejected

Rank correlation −0.17 with EV/EBITDA (NTM) · clear link from +0.60

Position on the sector map

This sector in gold, the other 19 sectors in blue. Dashed lines at 40 pp are illustrative.

Construction

Chemicals

Utilities

158

Telecom

Media

Travel & Leisure

Retail

Luxury

Consumer Goods

Logistics

Business Serv.

Aero & Defence

Electrical Eq.

Medtech

Pharma

IT Services

Semiconductors

Software

Automotive

Machinery

Travel & Leisure

How much the choices move the result

Beta and fit

R² (median)

24 %

Significant betas

17 of 20

Median bid-ask spread

0.26 %

Beta range across settings

0.36–0.83

What moves the value?

Change vs. prior month

+5 % vs. September

Peer impact on the median

−33 % to +21 %

Spread from peer choice (pp)

Spread from beta settings (pp)

Position on the sector map

Handle with care

Cost of capital

Cost of equity (CAPM)

“kE = rf + β · MRP”

rf = base rate, MRP = market risk premium, β = sector median beta.

WACC

“WACC = E/(D+E) · kE + D/(D+E) · kD · (1 − t)”

kD = base rate + credit spread; t = peer-average tax rate.

Tax rate

“t = average tax rate of the 20 peers”

Shown above as Tax rate (%).

Selection rules

Best-fit multiple

“lowest dispersion across the 20 companies”

The reference multiple is used only as a fallback.

Beta setting

“tightest spread among stable settings”

Replaces 5y monthly only if it passes the two-month rule.

Status

“|Δ value| ≤ 1 % and |Δ β| ≤ 0.03 → stable”

Up to ±5 % / ±0.06 → shifted a bit; beyond → shifted noticeably.

Scope

The 20 largest European listed companies by market value with core business in airlines, hotels, travel, gaming and leisure; primary listing on a European exchange; banks, insurers, financial services and real estate are excluded.