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Increased Site Traffic Fails to Impact US Hotel Profitability

December 15, 2009

Analysis of:Travel Industry Rebound Based on Site Traffic | seekingalpha.com

It may give some comfort to that year-over-year website traffic is increasing in the travel sector. Understanding that this is a leading indicator, this could be a basis for optimism. Unfortunately, for the US hotel industry, increased website traffic has not translated into bookings and the business being transacted is at dramatically lower average rates. Hotel unit Net Operating Income has fallen 34.9% in a year, while non-performing CMBS loans are now at 13.47%. 2010 holds more challenges.

Wynn Resorts becoming "more Chinese" with Hong Kong IPO

September 24, 2009

Analysis of:Wynn Resorts upbeat about Hong Kong IPO | www.ft.com

By floating the Wynn Resorts Macau IPO on the Hong Kong Stock Market, Steve Wynn hopes to become more tightly integrated with the Chinese gaming and financial communities. The Financial Times reports that the offering makes Wynn Resorts the first American-based company to establish a presence on the Hong Kong Stock Exchange. This strategy helps Wynn not only become more successful with the Chinese market in Macau over the near term, but in Las Vegas over the long term.

US Hotel Industry Recession Enters New Rate Erosion Phase

September 1, 2009

Analysis of:Five-Star Hotel Rates to Drop, Hotwire’s Bason Says | www.bloomberg.com

2009 will likely rank as one of the worst years for the United States hospitality industry in modern history. The week of June 27, this drop off entered a dangerous new phase – when compared to the same week, year over year, the national hotel average room rate began to fall more rapidly on a percentage basis than the average hotel occupancy percentage. This trend has now continued over the past eight weeks.

An Online Travel Agency (OTA) Litigation Squeeze Play

June 2, 2009

Analysis of:Expedia hit with $184 million penalty say plaintiffs | www.reuters.com

A recent King County summary judgement against Expedia (NASDAQ:EXPE), reportedly the largest consumer class action suit in Washington State history, creates a new front in the growing litigation battles facing the Online Travel Agency (OTA) community. Expedia competitors Priceline (NASDAQ:PCLN), Orbitz (NYSE:OWW), and privately held Sabre’s Travelocity potentially risk facing similar claims, although their exposure is somewhat limited relative to Expedia due to lower hotel sales volume and merchant model transaction ratios.

Google's Rumored Acquisition of Expedia Would be a Surprise

March 19, 2009

Analysis of:Expedia Shares Rally on Takeover Rumors | www.reuters.com

EXPE shares rise on another round of GOOG acquisition rumors. Acquiring a large and complex global travel agency with an extensive customer care organization and supplier account management group would be a significant departure from Google's 50+ previous technology oriented acquisitions. The travel industry represents one of Google's largest sources of advertising revenue - an acquisition of Expedia could be highly disruptive as OTAs and suppliers would reevaluate advertising spend supporting their largest competitor.

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