Travel And Leisure | "Petrol prices pump up fears for travel sector"

By: Rachel Cooper
Category: Travel And Leisure
Source: http://www.telegraph.co.uk

“Rising oil and petrol prices lead us to take a more cautious stance on the prospects for the travel and leisure sector,” cautioned analysts at Panmure Gordon. “Record petrol prices have the potential to alter longer-term leisure habits, with consumers reassessing the need to travel meaningful distances to undertake regular out-of-the-home leisure activities.”

With mortgage rates also rising and inflation “stubbornly high”, the broker argued that this was “not a comfortable backdrop for a sector heavily reliant on discretionary income”.Given increasing petrol prices, Panmure was particularly anxious about the outlook for businesses with out-of-town locations and downgraded both Cineworld and Goals Soccer Centres to “hold”.They were also worried about The Restaurant Group – whose restaurants such as Frankie & Benny’s are often located in sites such as leisure complexes – and cut their rating to “hold”.Conversely, the broker turned a buyer of JD Wetherspoon, arguing that its pubs could benefit from being “community-based and may therefore show resilience in the face of record petrol prices”.

Source: http://www.telegraph.co.uk/finance/markets/marketreport/9168115/Petrol-prices-pump-up-fears-for-travel-sector.html