Travel stocks under pressure as tweaks to U.K. quarantine rules fall flat

The U.K. government on Thursday added Malta, Madeira, the Balearics and some Caribbean islands to its green list of destinations. Local media in Malta reported that the government will allow fully vaccinated Brits into the country.

The U.K. also announced plans to drop quarantine rules for fully vaccinated travelers returning home from countries on its amber list, with details to be announced next month.

The industry remains “frustrated at restrictions which continue to cast a cloud over whether the public will be able to freely visit popular destinations this summer such as mainland Spain and Greece,” said Russ Mould, investment director at AJ Bell, in a note to clients.

“Airlines continue to face pressure on earnings, yet other sectors are enjoying a post-lockdown boost,” he said.

And while the regional government of the Balearic Islands welcomed being added to the green list, officials there have asked the Madrid government to impose tighter restrictions on U.K. visitors, who are currently allowed to enter without negative COVID-19 tests or proof of vaccination.

Friday brought news of hundreds of positive cases across Spain and thousands of quarantines linked to end-of-year school trips on the island of Mallorca, part of the Balearic Islands.

As well, some European leaders reportedly said they planned to follow the advice of German Chancellor Angela Merkel and tighten up borders to keep out the highly contagious delta variant of COVID-19 that has spread across the U.K.

Among those travel-related companies, shares of InterContinental Hotels Group IHG, -1.60% IHG, -1.23% slipped 2.3%, cruise company Carnival CCL, -1.06% fell 1.5% and International Consolidated Airlines IAG, -2.45% dipped 2%. Shares of low-cost airline easyJet EZJ, -1.49% and TUI TUI, -1.12% dropped more than 1% each.

Supporting the FTSE 100 were gains in shares of miners and oil companies after President Joe Biden announced that he and a bipartisan group of lawmakers had reached a deal on a $1 trillion infrastructure package, driving hopes it will spur economic growth further.

Shares of Anglo American AAL, +1.45% and Rio Tinto RIO, +1.03% RIO, +0.85% rose 2.6% and 0.9%, respectively. Shares in Royal Dutch Shell RDSA, +0.80% RDSA, +0.80% gained 1.3% and BP stock rose BP, +0.37% BP, +0.37% 0.7%.