Travel Recovery Favours Biggest Names

The Covid-19 pandemic has undoubtedly hit online travel players Airbnb, Booking, Expedia and TripAdvisor, but it's also an opportunity to strengthen their position

Rentsje de Gruyter 31 March, 2021 | 9:18AM
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The time has passed when the four major online travel companies - Booking (BKNG), Airbnb (ABNB), Expedia (EXPE) and TripAdvisor (TRIP) - were undervalued on the stock market. While travel is still banned in most countries, the companies have managed to rebound since the share prices of the four stocks plunged a year ago due to the Covid-19 pandemic. Three of the Big Four are now overvalued, according to Morningstar analysts, despite the fact it is likely to take three or four years for travel demand to fully recover.

Does this mean that investors should sell out of the online booking agent sector? Morningstar analyst Dan Wasiolek says the Covid-19 crisis is an opportunity for these companies to strengthen their market position and, therefore, their value. The so-called network effect is key to a competitive advantage in this sector says Wasiolek. Here we look at the outlook for the industry.

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Rentsje de Gruyter  Rentsje de Gruyter is a freelancer based in the Netherlands