Travelling to a fun location with loved ones is the greatest luxury of all. In recent weeks, the coronavirus outbreak has thrashed the share prices of travel-related businesses, especially airlines. Who knows when the world will return to normal, and when people will set out on tour again?
I consider online travel agencies to be an exciting investment opportunity. The best entry point is the largest listed online travel company, Booking.com. There are others like Expedia, Tripadvisor, Ctrip and Trivago. Airbnb is not listed yet.
At its high, Booking.com stock traded at above $2,000, giving the company a market value of over $80-billion
Up until March, there were simply not enough hotel beds to sell. In other words, hotel occupancies were too high, limiting growth. If that demand returns, it might take time for hotel property developers to catch up.
At its high, Booking.com stock (code BKNG in New York) traded at above $2,000, giving the company a market value of over $80-billion. It owns and operates several travel-fare aggregators and travel-fare metasearch engines, including its namesake and flagship Booking.com, Priceline.com, Agoda, Kayak, Cheapflights, Rentalcars.com, Momondo, and OpenTable. A large part of its business is outside of the US.
In my view, Booking.com needs more US operations. If I were running the company, I’d consider a knock-out merger offer for smaller rival Expedia, which has a market value of $12-billion.
Investors should buy this one for their portfolio now, while it’s going at 25% off! If you are going somewhere, use its service to book your flights and hotel room (you should always support the companies in which you invest).
• Theron is CEO of asset manager Vestact.
• From the April issue of Wanted 2020.