The Dart Group (LSE: DTG) share price has plunged in value this year. At the beginning of 2020, shares in the travel and leisure company were changing hands at around 1,700p. However, in March, the value of the company plunged as the sheer scale of the coronavirus outbreak became clear. The stock dropped to a low of 300p at the height of the crisis.
It’s clear why investor sentiment towards the Dart Group share price collapsed in March. The group owns one of the biggest package travel businesses in the country, Jet2holidays. As of yet, it’s unclear what the final impact on this business will be as a result of the pandemic.
Nonetheless, despite the company’s uncertain outlook in the near term, investors with a long-term outlook may profit from buying the Dart Group share price.
Dart Group share price on offer
The year started well for Dart. The company’s latest trading update showed an increase in overall profit before tax of 50% for the year ended March. That was before one-off charges and even though Jet2.com had to suspend its flying programme in mid-March due to the travel restrictions imposed by governments across Europe.
Following these travel restrictions, analysts are now forecasting a significant loss for the group in its current financial year. However, Dart looks set to return to growth in the following year. That could be a big positive for the Dart Group share price.
Management has been doing everything possible to maintain customer loyalty in the pandemic. Jet2 has been praised for its refund policy and customer service. That’s in comparison to other companies, which have been slow to refund customers.
This should help the company stage a recovery in the months ahead. The coronavirus crisis isn’t going to stop people going on holiday in the long term. And by putting customer service first and foremost, the firm has helped build an excellent reputation for itself in the industry. That may be a huge positive for the Dart Group share price.
The coronavirus crisis hasn’t gone away just yet so, clearly, Dart’s near-term outlook is uncertain. Still, over the long term, the company’s size and reputation with customers could help it return to growth when the European holiday industry starts to recover.
It may be some time before the business returns to the rates of growth seen before the crisis, but it already has the infrastructure in place to manage large numbers of customers. It can also offer a relatively low cost compared to peers. That should help the group capture market share, which is especially important in a weak market.
As such, now could be a good time to snap up the Dart Group share price as part of a diversified portfolio. Doing so could help you benefit from the company’s recovery over the next few years as it uses its position in the UK leisure market to capture market share. This may lead to higher profits and large total returns for investors in the years ahead.
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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.