Investing
Terror Alerts and Travel Stocks (PCLN, EXPE, OWW, TZOO, MMYT, UTA, OEH, CCL, UAL, FAA)
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Online travel sites have been on fire and a trend of airline consolidation mergers has been very good to the travel and leisure sector in transportation. But what happens when United States citizens hear about a travel advisory with heightened terror alerts for U.S. citizens traveling to Europe, or traveling to anywhere else that is a common destination? We are taking a look at sector leaders and the reactions seen in priceline.com Inc. (NASDAQ: PCLN), Expedia Inc. (NASDAQ: EXPE), Orbitz Worldwide Inc. (NYSE: OWW), Travelzoo Inc. (NASDAQ: TZOO), MakeMyTrip Limited (NASDAQ: MMYT), Universal Travel Group (NYSE: UTA), Orient-Express Hotels Ltd. (NYSE: OEH), Carnival Corp. (NYSE: CCL), and United Continental Holdings, Inc. (NYSE: UAL).
priceline.com Inc. (NASDAQ: PCLN) is down almost 2.5% to $329.45, Expedia Inc. (NASDAQ: EXPE) is down about 2.3% at $27.10, and Orbitz Worldwide Inc. (NYSE: OWW) is down 3% to $6.18. The smaller destination is Travelzoo Inc. (NASDAQ: TZOO) and its shares were down almost as much as 5% at $25.20 today.
MakeMyTrip Limited (NASDAQ: MMYT), a hot IPO of late, is also seeing a 2.7% slide and shares are down at $37.57. This is an Indian travel agency that started out as a destination site for travel options in India. India is far from the E.U., but the Mumbai terror attacks have left the minds of very few.
Universal Travel Group (NYSE: UTA) has already had a very tough year as shares of the travel service provider offering air ticketing and hotel booking services have fallen from over $16.00 to under $5.00 and its shares are down 1% to $4.74.
Orient-Express Hotels Ltd. (NYSE: OEH) is well-known for its luxury hotels, train and cruises, and shares are down 4.8% at $10.56 versus a 52-week range of $6.80 to $15.54.
Carnival Corp. (NYSE: CCL) was noted in our E.U. ties piece with its latest annual report noting, “Our European brands represent 33% of our total capacity at November 30, 2009, and we expect them to increase to 37% of our total capacity by 2012, assuming no new acquisitions, transfers or withdrawals are announced other than as previously discussed.” Carnival shares are down only 1.2% at $37.93 today versus a 52-week trading range of $28.71 to $44.21.
United Continental Holdings, Inc. (NYSE: UAL) is the new combined Continental-United merger stock and it has many daily flights to and from Europe from major US cities. Its shares are down only 1.3% at $24.38. The Guggenheim Airline ETF (NYSE: FAA), formerly the Claymore/NYSE Arca Airline ETF, is down 2.06% at $37.05 versus a 52-week range of $21.98 to $38.14; and it does have international carriers in its weighting.
Of course, terror alerts do far less damage than actual terror attacks. However, they give travelers the right to change their travel plans often without paying any of the normal penalty or fees travelers pay for making any last-minute changes to their itineraries.
JON C.OGG
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