Nomura Securities on U.S. Online Travel Agencies: An Update on the Competitiveness of the APAC Market for OTAs

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Nomura Securities on U.S. Online Travel Agencies by Brian Nowak

Nowak said, "We remain bearish on the U.S. OTAs and continue to believe the APAC market will be highly competitive and expensive to grow in. Recent results from China-based OTAs – Ctrip (Nasdaq: CTRP)(Buy) and eLong (Nasdaq: LONG) (Not rated) indicate they are increasing their use of discounting and couponing in an attempt to gain market share. The difficulties in China and presence of entrenched local operators in the other largest APAC online travel markets in our view will continue to make the APAC region difficult for the U.S. based OTAs to penetrate. We maintain our Reduce rating on Priceline (Nasdaq: PCLN) and Neutral ratings on Expedia (Nasdaq: EXPE) and Orbitz Worldwide (Nasdaq: OWW)."

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