By Teresa Rivas
Life's been a beach for many travel stocks in the postpandemic period. Those that have been left behind stick out like sore hitchhiker's thumbs, which helps explain recent activist interest.
On Tuesday, Activist Elliott Investment Management delivered a letter with its plans to Norwegian Cruise Line Holdings, after building a 10% stake in the cruise operator, as The Wall Street Journal first reported. Elliott highlighted that Norwegian has fallen behind peers in terms of private island offerings, an area of potential catch-up that Barron's highlighted in our leisure and hospitality Q&A two weeks ago.
A spokesperson for Norwegian said in a statement to the Journal: "Our board of directors and management team regularly engage with our shareholders to hear their views on our strategy and progress, and we appreciate their perspectives. Of note, this is the first we are hearing from Elliott Investment Management."
The news came the same day that activist Starboard Value, which now owns some 9% of Tripadvisor after it began building a stake last year, said it would nominate a majority slate for the company's eight-person board.
"Tripadvisor's Board and management team regularly engage with investors and welcome constructive input that furthers the common goal of enhancing value for all shareholders," the company said in a statement. "Management and the Board are focused on pursuing all avenues to drive value for shareholders."
Poor stock performance is a prerequisite for many activist campaigns, but in these cases, the contrast is glaring given continuously robust travel demand in recent years.
Norwegian is among the worst performers in the S&P 500 over the past five years, with the stock remaining near Covid-era levels, down around 15%, even as cruises have boomed. Royal Caribbean Group is up more than 300% over that period. Even market laggard Carnival has gained 30%.
TripAdvisor has lost nearly 75% of its value in the past five years, while Booking Holdings, parent of industry leading online travel agency Booking.com, is up by roughly the same amount, and Expedia Group is up 25%.
With that kind of underperformance, it's hard for companies to argue that management teams are above criticism. Last week, Norwegian's CEO stepped down, to be replaced by former Subway and Burger King CEO John Chidsey. While fears that artificial intelligence will replace many travel companies hit stocks recently, TripAdvisor's pain was compounded last week by a disappointing fourth quarter.
Norwegian and TripAdvisor shares are both jumping on Tuesday, so it's clear that investors are hopeful that the activists can deliver real change. While it's uncommon for activists to take over a board as Starboard is proposing, its takeover of Olive Garden owner Darden Restaurants' board began a turnaround for the stock. Elliott is no stranger to the travel space, as its activist push has helped propel recent outperformance for Southwest Airlines stock.
Still, a lack of quick fixes is a concern. As Truist analyst C. Patrick Scholes notes, Norwegian is behind in terms of private island destinations and massive ships that have benefited rivals like Royal Caribbean. Even though he's bullish on the stock, given the catch-up opportunity, he warns "designing and launching a megaship that can compete with RCL's would be at least a four-year process."
Likewise "Tripadvisor is in the process of repositioning the business across new strategic priorities," as Wedbush analyst Scott Devitt, but the company's "lackluster" full year guidance shows "the benefit of recent investments materializing over an extended period."
Write to Teresa Rivas at teresa.rivas@barrons.com
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(END) Dow Jones Newswires
February 17, 2026 11:10 ET (16:10 GMT)
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