Like the villain in a bad horror movie, the pandemic seems to never go away. Since March 2020, there has been a variety of coronavirus waves with the most recent being the Omicron strain.

However, the situation is much better this time around especially in terms of hospitalizations and deaths which is increasing confidence that the omicron variety is less mild than previous strains.

In part, this is because of vaccinations and boosters which is clearly not helping in terms of curbing the spread of the virus but is leading to less severe outcomes with many cases asymptomatic and going undetected.

So far, omicron hasn't affected the recovery in travel demand which picked up as it does during the holiday season. During the Christmas holiday, U.S. Transportation Security Administration (TSA) travel data showed that throughput at checkpoints is, on average, down by about 20% from 2019 levels and up nearly 100% from last year.

Thus, it's not surprising that travel stocks have posted impressive rallies in recent weeks after initially selling off on omicron fears.

This is evident by looking at travel stocks in categories like hotels, airlines, cruises, and online booking websites. These sectors are up between 10 and 20% off their recent lows. But, the most strength is probably found in the online booking and hotel stocks.

One reason for this is that airlines and cruises had to take on big loans and issue stock during the pandemic to ensure that they would not have to file for bankruptcy. So, it's not surprising that these two sub-sectors remain well-off at their highs, while hotels and online booking are so strong. These areas provide the most exposure to the upside in the travel recovery and aren't burdened by these financial constraints that will lead to lower EPS than pre-pandemic.

Another challenge for cruises and airlines is that fuel costs make up a significant chunk of their variable expenses. Energy prices are rising and are expected to keep rising in 2022 which could also erode margins.

Therefore, investors should look at hotel and online booking stocks to bet on the travel boom in 2022.