I think the concept of Australian travel is going to be a pretty big deal over the foreseeable future. I don’t know about you, but right now I can’t imagine travelling anywhere else in the world, except for maybe New Zealand. Not Asia, Europe, the United States or the United Kingdom. 

In fact, even achieving the reopening of our own state borders is proving to be a thorny issue in Queensland. Not so much in my home state of WA however; we see things a little differently.

So in a world where travel is likely to be largely limited to within our own shores, which shares are likely to benefit?

Transport for Australian travel

Alliance Aviation Services Ltd (ASX: AQZ) has been one of the real workhorses of the coronavirus pandemic and looks set to emerge on the other side a better positioned company. Alliance saw increased demand for its charter flights during the lockdown period. In addition, the company recorded increases in its fly-in-fly-out flight volumes, something it has nurtured as a core service offering.

Yet, it is Alliance’s recent award of flights to the Whitsundays by the Queensland Government that really tells the tale.  Alliance Airlines is structured as a nimble organisation with a low cost base. If we do have to live only with domestic tourism for a while, I believe the company will prosper. Conversely, a company like Qantas Airways Limited (ASX: QAN) is just too big to survive on local flights alone.

Furthermore, the company has recently completed a successful $91.9 million share placement which will see it well positioned to take advantage of growth opportunities whilst maintaining a strong balance sheet.  

Car parts and accessories

Bapcor Ltd (ASX: BAP) is the Asia Pacific’s leading provider of vehicle parts, accessories, equipment, and services. Some of its well known brands include Autobarn and Midas. It stands to reason that if travel within Australia becomes an increasing trend, many of us will choose to get where we’re going by car. 

Bapcor has grown its sales by an average of 14.9% every year for 6 years. In addition, the company’s share price has grown by an average of ~24% each year over the same period. If the Bapcor share price continues to rise at this rate, it would take just over 3 years to double an initial investment in the company. 

Foolish takeaway

I believe the increase in domestic tourism will provide an opportunity for particular companies to shine. The big international tourism operators like Webjet Limited (ASX: WEB) and Crown Resorts Ltd (ASX: CWN) are likely to see some benefit. But I feel it will mostly be those companies that facilitate regional travel which will really enjoy the spoils of a surge in domestic tourism.

More reading

• ASX 200 finishes higher by 0.8%, Carsales share price driven up by FY20 guidance
• Top brokers name 3 ASX 200 shares to buy today
• Why G8 Education, InvoCare, Megaport, & Webjet shares are tumbling lower
• Is the Webjet share price going to crash lower?
• ASX 200 jumps almost 4%, Webjet share price soars

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor and Webjet Ltd. The Motley Fool Australia has recommended Crown Resorts Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Looking to add to your share portfolio? I think the ASX tech sector is a good place to start, particularly the small- to mid-cap segment of the market. There are a number of fast growing companies with strong growth prospects over the next 5 years.

Two of my top picks right now are Pushpay Holdings Ltd (ASX: PPH) and Nearmap Ltd (ASX: NEA). Both companies have a growing international presence and strong market positions in their respective niches.

Pushpay

Pushpay is a donor management platform provider for the faith, not-for-profit, and education sectors. The company targets the large-to-medium church sector of the US market. Pushpay has been growing its market share in this market over the past few years, resulting in strong recurring revenue growth.

At the end of 2019, Pushpay acquired rival Church Community Builder, which provides digital church management systems to over 4,000 US churches. This acquisition has expanded its overall offering to church clients and is likely to drive further growth over the next few years.

Pushpay delivered a 39% increase in total processing volume to US$5 billion for the 12 months to 31 March 2020, while its operating revenue increased by 33% to US$127.5 million. The company’s gross margin, expanded from 60% to 65% in FY 2020. The company anticipates further high growth for FY 2021.

May this year proved to be a particularly strong month for Pushpay, with its share price up by a staggering 69%. Due to the closure of many churches across the US during the coronavirus, demand for its online platform has recently increased.

I believe that Pushpay still has significant potential for long-term growth moving forward, as it achieves scale efficiencies and gains further market share.

Nearmap

Another ASX tech share to look at is Nearmap. The company is an Australian aerial imagery and location data company that provides geospatial map technology for businesses, enterprises and government customers across Australia, New Zealand, the US, and Canada.

Nearmap captures images of a particular location approximately 6 times a year. Google Maps, in comparison, typically only updates its images every couple of years or so. Therefore, the information Nearmap provides is typically more accurate and up to date.

Nearmap has been growing its subscriber base strongly over the past few months. What is particularly pleasing is that its average revenue subscription continues to improve, which is flowing through to higher margins. Customer churn is now below 10% on a 12-month rolling basis, down from 11.5% at the end of last year.

The North American market in particular offers Nearmap strong growth potential over the next 5 years.

More reading

• 3 ASX shares to buy and hold for the next decade
• Why Nearmap and this ASX mid cap share could be strong buys
• $3,000 invested in these 2 shares could make you a fortune over the next 10 years
• The top ASX growth shares I would buy for the 2020s
• Sezzle shares and 2 other ASX techs soared up to 50% in the past 4 weeks

Phil Harpur owns shares of Nearmap Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. and PUSHPAY FPO NZX. The Motley Fool Australia has recommended Nearmap Ltd. and PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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