Nomura Securities on U.S. Online Travel Agencies: RoomKey.com - Unlocking More Direct Bookings?
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Rating Summary:
2 Buy, 19 Hold, 5 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Nomura Securities on U.S. Online Travel Agencies: RoomKey.com - Unlocking More Direct Bookings?
Analyst, Brian Nowak, said, "Yesterday, six leading U.S. hotel chains (Choice (NYSE: CHH), Hilton, Hyatt (NYSE: H), InterContinental (NYSE: IHG), Marriott (NYSE: MAR), and Wyndham (NYSE: WYN)), announced the launch of a new joint-venture hotel search and booking website, RoomKey.com. RoomKey enables users to search and price compare hotels from inventory across all six partners. Most notably for the OTAs, RoomKey directs all travelers’ traffic to the hotels’ websites to book, sidestepping the OTAs"
"We estimate the RoomKey JV is charging its hotel partners an ~10% commission fee for all bookings (operating under the agency model). This is significantly lower than the current 18-22% charged in the merchant model by Expedia (Nasdaq: EXPE) and the ~15% average charged by Priceline (Nasdaq: PCLN) for Booking.com."
"We acknowledge RoomKey is brand new and has far from a 100% certainty of success. That said, RoomKey provides the hotels with a new, low-cost, multi-branded online distribution channel that they control. Said another way, it’s a direct competitor to the OTAs. Given the initial U.S. roll-out, Expedia is the most directly threatened by this site, as U.S. hotels represent an estimated 35-40% of revenue. For Priceline, we estimate only ~15-20% of gross profit is from domestic hotels, although RoomKey does pose a threat to Booking.com’s ability to gain significant U.S. marketshare. We continue to rate Expedia Neutral and Priceline Reduce."
Analyst, Brian Nowak, said, "Yesterday, six leading U.S. hotel chains (Choice (NYSE: CHH), Hilton, Hyatt (NYSE: H), InterContinental (NYSE: IHG), Marriott (NYSE: MAR), and Wyndham (NYSE: WYN)), announced the launch of a new joint-venture hotel search and booking website, RoomKey.com. RoomKey enables users to search and price compare hotels from inventory across all six partners. Most notably for the OTAs, RoomKey directs all travelers’ traffic to the hotels’ websites to book, sidestepping the OTAs"
"We estimate the RoomKey JV is charging its hotel partners an ~10% commission fee for all bookings (operating under the agency model). This is significantly lower than the current 18-22% charged in the merchant model by Expedia (Nasdaq: EXPE) and the ~15% average charged by Priceline (Nasdaq: PCLN) for Booking.com."
"We acknowledge RoomKey is brand new and has far from a 100% certainty of success. That said, RoomKey provides the hotels with a new, low-cost, multi-branded online distribution channel that they control. Said another way, it’s a direct competitor to the OTAs. Given the initial U.S. roll-out, Expedia is the most directly threatened by this site, as U.S. hotels represent an estimated 35-40% of revenue. For Priceline, we estimate only ~15-20% of gross profit is from domestic hotels, although RoomKey does pose a threat to Booking.com’s ability to gain significant U.S. marketshare. We continue to rate Expedia Neutral and Priceline Reduce."
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