The Interactive Travel Report this week introduces the ITR Index, a composite of trading values of publicly traded online and Internet travel-related companies.
The new industry barometer is another sign that online travel has matured into a viable and robust business with its own identity, separate in many ways from that of brick-and-mortar travel agencies, traditional travel suppliers and GDSs.
Every stock index must begin somewhere, so we’re starting the clock at 100 this week. Each issue, we’ll take a look at how the ITR Index is faring and include relevant commentary on the state of the industry.
What are the companies that make up the ITR Index? How did they get chosen? Here’s a look at what’s in the index as it starts:
Pegasus Systems (PEGS) A dominant force in processing online hotel transactions, we’re hard-pressed to think of any interactive travel business that isn’t in some way touched by Pegasus. At the moment, its stock price is healthier than most. Moves to restructure the company have brought new focus to Pegasus, to its consumer travel Web site TravelWeb and to its behind-the-scenes hotel reservations booking system, making it a shoo-in for the ITR Index.
Preview Travel (PTVL) With more than eight million registered members and a dominant role in selling travel online, the San Francisco company is as pure-play an interactive travel stock as it gets. Gomez Advisors recently announced that Preview had captured the number-one ranking on its Summer Internet Travel Agent Scorecard, which could give its flagging stock price a lift. Current management turmoil notwithstanding, the fact that the company never has become the hot Internet stock du jour means its stock price represents one of the best measures of sentiment about the industry overall.
Priceline.com (PCLN) It is tempting to ignore Priceline.com, what with its diversification to automotive services and other big-ticket consumer items. But we can’t. The Stamford, Conn., company remains one of the biggest interactive travel success stories ever: A share price that’s zoomed beyond anyone’s wildest expectations, and windfall returns for investors such as Delta Air Lines. When Priceline.com’s stock returns to earth-and it will-we’ll be curious to see the repercussions on the industry. If for no other reason, Priceline.com is part of the lineup-for now.
Sabre (TSG) We know, we know. Sabre isn’t an interactive travel company. Or is it? Sabre might not want to be branded as part of our business; travel agents, who remain its bread and butter, would throw a hissy fit. But consider the company’s ownership of leading online agency Travelocity.com, its unveiling of a new Turbo Sabre on the Web, its growing use of the Web as a contact point for travelers who book-or are booked-through Sabre, and a lot of the scuttlebutt on the conference circuit. These all give us reason to believe that the Fort Worth, Texas, company is focusing on transactions instead of the travel agent. And when the volume of transactions shifts to the Internet, so will Sabre. The same thing can’t be said of its competitors.
Uniglobe.com (UTO) When Uniglobe Travel Online changed its name to Uniglobe.com late last month, we knew it was serious about interactive travel. The strategic move to brand the Canadian company’s electronic commerce activities shows just how important the Internet is becoming to its travel distribution initiative. Others are sure to follow. Also worth noting-and another reason for our selection-is that Uniglobe.com’s largest shareholder is Uniglobe Travel International, the world’s largest single-brand travel franchise organization. With that kind of pedigree, how could we leave UTO out?
The companies comprising the ITR Index represent a beginning. Just as companies on the larger composites change with some regularity, we anticipate that ours will change, too. Next week, we’ll take a look at the likeliest candidates for future inclusion-businesses on the verge of a public stock offering.
If you have any suggestions for this list, or think we’ve left out a company that should be included in the initial ITR Index, please e-mail me at christopher@elliott.org.
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