Leading travel stocks after a third of 2008

[UPDATE at bottom of post]

Some interesting stats...

Expedia: started 2008 on $0.31 a share. Now $0.25. -19%

British Airways: started 2008 on £3.09 a share. Now £2.48. -19%

EasyJet: started 2008 on £6.13 a share. Now £3.24. -47%

MoneySupermarket (owner of TravelSupermarket): started 2008 on £1.40 a share. Now £1.14. -19%

Orbitz Worldwide: started 2008 on $8.50. Now $8.78. +3%

Priceline: started 2008 on $1.15 a share. Now $1.26. +10%

Ryanair: Started 2008 on Euro 0.39 a share. Now Euro 0.30. -23%

SilverJet: started 2008 on £0.48 a share. Now £0.15. -69%

Thomas Cook: started 2008 on £2.82 a share. Now £2.66. -7%

TUI Travel: started 2008 on £2.94 a share. Now £2.41. -18%

Travelzest: started 2008 on £1.01 a share. Now £1.02. +1%

Travelzoo: started 2008 on $0.14 a share. Now $0.11. -21%

UPDATE:

Sam I Am asks in the comments about the market conditions as a whole.

FTSE 100: started 2008 on 6456. Now 6215. -4%

NASDAQ: started 2008 on 2652. Now 2464. -7%

So one might say that the Orbitz and Priceline in the US - and not Expedia - are bucking the trend, while airlines in the UK are seeing a decline in share price worse than the overall market decrease.

Kevin May, editor, Travolution

Priceline does a Farecast

Farecast - the air ticket trend site - has made quite a splash in the US, although the concept has yet to catch on here in the UK.

So Priceline has announced a similar piece of functionality, known as Inside Track.

Innovative, flexible, consumer-focused and price-led tool.

It seems that OTAs are now beginning to look at the whizzy functionality created by the so-called Travel 2.0 start-ups in the US and take the best bits.

This is where it might get tricky - or, alternatively, open up new opportunities - for the Silicon Valley types.

If the big boys begin to wade in with their own nifty tools and tricks, start-ups will be forced to innovate once again. Which can be good (they will always have first-mover advantage) or bad (they run out of ideas).

Kevin May, editor, Travolution

Technorati tags: priceline farecast silicon valley

Yahoo! should! buy! Expedia! or! Orbitz!

Following last night's post pondering the state of Yahoo!, Silicon Valley guru Sramana Mitra has shared her thoughts on what Yahoo! should do next.

Given that it's probably losing the search battle with Google, Mitra reckons Yahoo! should snap up an online travel company.

But not just a content site or meta search engine. Oh no, aim high.

Yes, really high - like Expedia, Priceline of Orbitz.

"Yahoo should acquire one of them, and become a serious player."

A few questions about these pearls of wisdom:

• How much should a company which has lost $20 billion in market cap over two years be willing to pay for a business like Expedia?
• Is this really the right strategy?
• How would the market react to a - still reasonably signifcant - search company owning a online travel company?
  

Mitra offers more advice on the GigaOm.

Kevin May, editor, Travolution

Hat-tip: The Boot

Technorati tags: yahoo expedia priceline orbitz

Travolution@PhoCusWright 07 - Metcalfe's law

The value of a telecommunications network is proportional to the square of the number of users of the system.

Jeffery Boyd of Priceline opens his keynote with a reference to Metcalfe's Law.

He makes some interesting points about social networks:

"Social networks give everybody a shot a celebrity," he says. Not heard it in that way before - but it makes a lot of sense.

In America, he adds, more people are interested in Paris Hilton or a dog belonging to Ellen De Generes than the "Race for the White House" (TM).

And so to reach those people is a vital part of the future marketing strategy for online travel agencies and other travel companies.

However, Boyd highlights the concern of a number of travel companies with regards to brand value by asking whether a company should target sub-groups on social networks that have slightly, er, unusual interests. [The example he gives is displaying hotel ads alongside discussion groups about cannabis cafes in Amsterdam]

Priceline would not, he says.

Kevin May, editor, Travolution

Shatner the legend in new Priceline ads

Former Star Trek frontman, occasional crooner and all-round cult icon, William Shatner, is starring in a new round of ads for US online travel giant Priceline.

Visit the site to view the campaign in various multimedia formats.

Expedia pull-out could certainly set precedent

Anyone who was surprised by American Airlines’ recent decision to yank US first class and business class fares off the Expedia.com web site should take a stroll down the cluttered runway that is aviation distribution history.

For starters, American’s move is almost comical - though probably not to Expedia bosses. The airline was a co-founder (or co-conspirator depending on who you ask) of the online distribution phenomenon.

Like its peers, American initially viewed the internet as the anecdote to the pricey GDS.

The airlines still do see the internet that way, only today they’ve twigged that it only really works on the balance sheet if the majority of sales are coming through thier own sites.

Well, hindsight is always 20/20.

American’s recent move is a sort of revelation. You can almost here AA accountants asking, “Hang on a second…why aren’t we controlling the sale of our premium fares?”

To use an old, yet quite applicable adolescent term: Duh!

Sure, Expedia existed and was already a household name before American, along with four other US major carriers, established bucket-fare site Orbitz. But, way back in the late 90s, before anyone figured out just how much power the internet would wield over airline distribution, the likes of Expedia weren’t a threat (even though, of course, they were).

Northwest Airlines sniffed the danger in 2002 when it pulled net fares off the Priceline website, so, again, this is not exactly a new tune American is singing.

The airlines have gone several rounds with the online players over the years in an attempt to claw back control over their most valued products.

American’s recent move simply highlights the point that the airlines have figured out that handing over total control of their inventory is destroying their yield and that they must do something about it.

In other words, it should not come as a surprise if other carriers soon follow American’s lead.

As for where that leaves Expedia...well, you could almost argue they will be left right back where they started and doing what they do best: selling the heck out of cheap fares.

Tricia Holly Davis, chief writer, Travolution

Travolution@PhoCusWright Brussels - Hotels unsure over user reviews

A session focussing on the luxury hotel market...

PhoCusWright’s John Bray asks how enthusiastic the panel – Kristie Goshow (Jumeirah), Marcus Bernhardt (Steigenberger), Giorgio Boscolo (Boscolo) and Klimis Messios (Golden Tulip) – would be to include user-generated content on their websites.

Unsurprisingly the panel is keen to include user reviews - but equally lacking a shock factor is a general agreement that all comments will be moderated to ensure “malicious” activity isn’t shared with consumers.

Or is that bad reviews?

Goshow also admits being “overwhelmed by new search options” – perhaps she is still reeling from the previous speech from Yahoo! Travel’s Tim Frankcom, who revealed a myriad of marketing options available to advertisers across its various channels.

Interestingly Goshow, during her presentation, suggests Priceline “could have been ahead of the game when they said name your own price”.

It appears the middle classes are now trading upwards to luxury hotels, while high end consumers are now looking for bargains. In other words: they are pitching in with rates of their own, perhaps casting doubt over marketing strategies.

Kevin May, editor, Travolution