Zacks Industry Outlook Highlights: Priceline, Expedia, Orbitz Worldwide, Ctrip International and TripAdvisor

Nov 13, 2013, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Nov. 13, 2013 /PRNewswire/ -- Today, Zacks Equity Research discusses the U.S. eCommerce (part 2), including Priceline (Nasdaq: PCLN-Free Report), Expedia (Nasdaq: EXPE-Free Report), Orbitz Worldwide (NYSE: OWW-Free Report), Ctrip International (Nasdaq: CTRP-Free Report) and TripAdvisor (Nasdaq: TRIP-Free Report).


Industry: eCommerce (part 2)


The U.S. Commerce Department expects international travel to the U.S. to continue increasing over the next few years. Visitor volume is currently expected to increase 3.7-4.2% a year from 2013 to 2017 leading to a 26% increase in the number of users by 2018. Visitors from the Caribbean are expected to be the slowest-growing (1%). The Middle East, Asia and South America are expected to grow 67%, 60% and 52%, respectively.

The fastest growth is expected to come from China (229%), Saudi Arabia (191%), Russian Federation (79%), Brazil (66%), Argentina (65%) and Columbia (54%).

The Travel and Tourism industry remains one of the country's strongest industries, although the second quarter (latest available data) saw a deceleration in its growth rate. According to the BEA, lower air passenger travel as well as reduced automotive rental and leasing affected the industry during the quarter. As a result, the industry grew 2.5% in the quarter, same as the real GDP growth of 2.5% (in the first quarter it grew 7.3% compared to GDP growth of 1.1%).

The top travel booking sites are,,,, (acquired by Priceline),, and Since and Kayak are part of Priceline (Nasdaq: PCLN-Free Report) and both and part of Expedia (Nasdaq: EXPE-Free Report), this narrows down the top companies in the segment to Priceline, Expedia, Orbitz Worldwide (NYSE: OWW-Free Report) and Travelocity. However, there are several others worth considering that include Ctrip International (Nasdaq: CTRP-Free Report) and TripAdvisor (Nasdaq: TRIP-Free Report), which was spun off from Expedia, among others.

The global travel market grew 4% in 2012 and is expected to grow another 2-3% this year. The Asia/Pacific region is expected to see the strongest growth (up 6%), followed by Europe and South America (mainly Brazil) at 2% each. North America (mainly U.S. is expected to be flat this year [World Travel Monitor 2012].

According to the June 2013 TravelClick North American Hospitality Review (NAHR), both occupancy and average daily rates (ADRs) in North America are seeing steady growth this year. Occupancy rates grew much more than ADRs most categories, indicating that demand is coming at the cost of prices. Individual occupancy was higher than group occupancy with individual leisure occupancy being stronger than business occupancy. In the second quarter of 2013, total travel occupancy grew 5.3% from last year with ADR growth at 3.5%.

Group travel is expected to be flattish in the September quarter, although individual travel (both in terms of occupancy and ADRs) is expected to accelerate.

Online travel agents (OTAs) are growing the fastest this year: up 11.7% in the second quarter, according to the TravelClick North American Distribution Review (NADR). The hotels' own websites were up 8.1%, with direct walk-ins and calls to the hotel growing 4.4%. The global distribution system, used by travel agents and CRS (calls to a hotel's toll-free number) were also up 5.7% and 3.7%, respectively, reversing a negative trend.

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