ASX travel shares have been smashed in 2020. The travel sector is one of the worst affected by the coronavirus pandemic as borders have been locked down and aeroplanes grounded.
That means a number of big travel companies are in trouble. We've already seen Virgin Australia enter voluntary administration but it's far from the only company with cash flow issues.
The Aussie travel agency groups are in the spotlight, as are the secondary companies in the travel sector. But with the S&P/ASX 200 Index (ASX: XJO) climbing higher this week, could now be the time to buy ASX travel shares again?
Why ASX travel shares could be in the buy zone
I've been watching Corporate Travel Management Ltd (ASX: CTD) in recent weeks. There's been a lot happening for the travel sector in recent weeks and the Corporate Travel shares have rocketed 40.24% in the last week and a half.
Granted, the group's shares are still down 42.42% since the start of the year. But Australia is getting serious about winding back COVID-19 restrictions and that's good news for ASX travel shares.
If we start to see more domestic travel in the coming months then Corporate Travel could see more business in 2020. Aussie companies could start booking more executive travel if the government relaxes restrictions further.
It's not just Corporate Travel that could be undervalued right now. Webjet Limited (ASX: WEB) shares are also worth watching if earnings can pick up again soon.
Webjet shares are down 71.50%, which doesn't scream buy to me right now. However, just because there's extra risk doesn't mean it's not a good time to buy. The Webjet share price is up 18.86% since 23 April, which means there's positive momentum behind the ASX travel share.
But wait… it's not that simple
It's easy to get carried away and dive headfirst into ASX travel shares. However, these shares have been hammered for a reason.
Institutional investors have been selling for a reason, and I don't think I know something that they don't. It could be a great chance to buy ASX travel shares for a good price right now. But it's important to only invest what you can afford to lose, and remember you're investing for the long-term – think the next 10 years rather than the next 10 days.
