Market Overview

2 Debates Heading Into Online Travel Earnings

Share:
2 Debates Heading Into Online Travel Earnings
  • Airbnb’s explosive growth has many online travel investors worried.
  • Cowen & Co projects that Airbnb could become a legitimate threat to the hotel industry by 2018.
  • Cowen sees the Priceline Group Inc (NASDAQ: PCLN)/ Tripadvisor Inc (NASDAQ: TRIP) Instant Book partnership as a positive for both companies.

In a new report, Cowen & Co analyst Kevin Kopelman discusses two topics of contention among online travel investors headed into Q3 earnings season. He also highlights Cowen’s top stock picks in the space ahead of earnings.

The Airbnb Impact

The popularity of Airbnb has taken off in recent years, and the level of disruption that the company will have on other online travel companies remains a contentious topic. Cowen estimates that Airbnb will generate $7.5 billion in bookings and nearly $1 billion in revenue in fiscal 2015. While the $7.5 billion in bookings is twice what Cowen estimates the company logged in 2014, it is still well short of the $51 billion in bookings estimated for Priceline Group and the $23 billion in bookings estimated for Expedia Inc (NASDAQ: EXPE).

“While concentrated impact is being felt in a number of large urban markets like Paris and NYC, we note to date Airbnb has only taken an est. 2% of the market from the hotel industry,” Kopelman explained. He adds that, if Airbnb reaches its growth targets, it could become a threat to the hotel industry by 2018.

Priceline Joins TripAdvisor Instant Book

While some see Priceline’s decision to adopt TripAdvisor’s Instant Book as a puzzling move on Priceline’s part, Kopelman sees it as a win-win for both companies. Priceline contributes about 24 percent of TripAdvisor’s total revenue, and Priceline now has an opportunity to gain an information edge over Expedia and test out TripAdvisor’s platform with little risk involved.

Stock Picks

Kopelman names Expedia and HomeAway, Inc. (NASDAQ: AWAY) as its top two online travel picks headed into earnings season. Cowen also has an Outperform rating on Priceline and a Market Perform rating on TripAdvisor.

Disclosure: the author holds no position in the stocks mentioned.

Latest Ratings for PCLN

DateFirmActionFromTo
Feb 2018MaintainsHoldHold
Jan 2018MaintainsMarket PerformMarket Perform
Dec 2017DowngradesBuyNeutral

View More Analyst Ratings for PCLN
View the Latest Analyst Ratings

Posted-In: Airbnb Cowen & Co. Kevin KopelmanAnalyst Color Travel Analyst Ratings General Best of Benzinga

 

Related Articles (EXPE + AWAY)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
APDUpgrades215.0
DPZReiterates325.0
ORLYMaintains435.0
NOWMaintains245.0
MCOMaintains195.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

How Allergan Could Be Pfizer's Rocket Ship

Blue Chip Tech Companies Struggle To Adapt To The Modern Landscape