Analyst downgrades three major online travel players
December 21, 2007
A Stifel Nicolaus & Co. analyst has downgraded three of the biggest online travel players from buy to hold warning of a possible slowing in the market place. Orbitz Worldwide Inc., Priceline.com Inc. and Expedia Inc. have all been downgraded saying that while 2007 is seeing strong performance, trends in U.S. travel have dipped in the fourth quarter and may mean that consumers have less cash to spend on discretionary purchases, such as vacations. This is sure to be the same in the UK market as the credit crunch makes consumers more nervous, higher interest rates mean bigger mortgage repayments and general economic uncertainty means less are willing to shell out on big purchases.
Is this an omen of the coming months for travel? Could we see a really noticeable slowdown in January as the expense of Christmas bites as well?
Travel is always one of the first industries to suffer when consumer confidence dips. It’s a big expenditure and not essential so it can either make consumers hold off for a few months to make the purchase or change their thinking and perhaps make them book closer to home. Could bode for a good year ahead for UK tourism and short haul tour operators (and could mean no fun for long haul…)!