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Expedia Begins to Offer Booking for Hotel Rooms in Cuba
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Expedia, Inc. (EXPE - Free Report) announced that it has started to offer online booking of hotel rooms in Cuba for both U.S. and non-U.S. travelers through Expedia.com, Travelocity, Hotels.com, Orbitz and CheapTickets.
For U.S. travelers, the company is offering its services under a general license right for all travel service providers. For non-U.S. travelers, it’s functioning under a specific license issued by the U.S. Treasury's Office of Foreign Assets Control (OFAC) in Dec 2016.
Expedia is the latest to join the list of U.S. airlines and cruise operators who have started operating in Cuba since President Obama’s Dec 17, 2014, announcement of restoring diplomatic ties.
The company is working with 25 of its partner hotels including Blue Diamon, Barcelo, Sercotels, Warwick, Valentin and Blau.
Investors will keep an eye on whether international expansions such as this could boost Expedia shares, which have underperformed the Zacks Internet - Commerce industry over the last one year. The company has returned 26% compared with the industry’s gain of 46.7%.
Notably, Expedia’s closest peer Priceline is the first U.S. online travel company to collaborate with Cuba. It inked a deal last year per which hotel rooms in the country were made available to U.S. customers through its subsidiary Booking.com.
Easing Bilateral Ties Boost Travel
Improvement in diplomatic relations between the two nations has boosted the travel and tourism sector of Cuba. In 2016, Cuba recorded 4 million visits, up 13% from 2015, with U.S. visits surging 74%. U.S. visits alone could increase seven-fold to 2 million by 2025, per a recent survey.
Officially, travel to Cuba is still illegal under the U.S. trade embargo. However, U.S. travelers are permitted by the OFAC under ‘general licenses’ that allow traveling on family, sports, religious and cultural grounds.
OFAC declared last year that the rule to visit Cuba only in groups has been relaxed, thereby enabling individual travel under specified categories. Expedia stated that it will ask travelers to certify that they fit one of the twelve permitted categories.
Previously, travel agencies and tour groups could only reserve hotels for travelers. Airbnb is the only major American lodge booking service operating in Cuba.
To Conclude
We believe that the expansion of its services to Cuba will boost Expedia’s core OTA business and international revenues. In the last reported quarter, Core OTA segment revenues were up 10.4% year over year and contributed 77.6% to gross revenues.
The long-term expected earnings per share growth rates for Alphabet and Monolithic Power are 16.7% and 17%, respectively.
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Expedia Begins to Offer Booking for Hotel Rooms in Cuba
Expedia, Inc. (EXPE - Free Report) announced that it has started to offer online booking of hotel rooms in Cuba for both U.S. and non-U.S. travelers through Expedia.com, Travelocity, Hotels.com, Orbitz and CheapTickets.
For U.S. travelers, the company is offering its services under a general license right for all travel service providers. For non-U.S. travelers, it’s functioning under a specific license issued by the U.S. Treasury's Office of Foreign Assets Control (OFAC) in Dec 2016.
Expedia is the latest to join the list of U.S. airlines and cruise operators who have started operating in Cuba since President Obama’s Dec 17, 2014, announcement of restoring diplomatic ties.
The company is working with 25 of its partner hotels including Blue Diamon, Barcelo, Sercotels, Warwick, Valentin and Blau.
Investors will keep an eye on whether international expansions such as this could boost Expedia shares, which have underperformed the Zacks Internet - Commerce industry over the last one year. The company has returned 26% compared with the industry’s gain of 46.7%.
Notably, Expedia’s closest peer Priceline is the first U.S. online travel company to collaborate with Cuba. It inked a deal last year per which hotel rooms in the country were made available to U.S. customers through its subsidiary Booking.com.
Easing Bilateral Ties Boost Travel
Improvement in diplomatic relations between the two nations has boosted the travel and tourism sector of Cuba. In 2016, Cuba recorded 4 million visits, up 13% from 2015, with U.S. visits surging 74%. U.S. visits alone could increase seven-fold to 2 million by 2025, per a recent survey.
Officially, travel to Cuba is still illegal under the U.S. trade embargo. However, U.S. travelers are permitted by the OFAC under ‘general licenses’ that allow traveling on family, sports, religious and cultural grounds.
OFAC declared last year that the rule to visit Cuba only in groups has been relaxed, thereby enabling individual travel under specified categories. Expedia stated that it will ask travelers to certify that they fit one of the twelve permitted categories.
Expedia, Inc. Net Income (TTM)
Expedia, Inc. Net Income (TTM) | Expedia, Inc. Quote
Previously, travel agencies and tour groups could only reserve hotels for travelers. Airbnb is the only major American lodge booking service operating in Cuba.
To Conclude
We believe that the expansion of its services to Cuba will boost Expedia’s core OTA business and international revenues. In the last reported quarter, Core OTA segment revenues were up 10.4% year over year and contributed 77.6% to gross revenues.
Around 43% of the quarterly revenues were generated internationally, with 57% coming from domestic sources. (See more: Expedia Q1 Loss Narrower Than Expected, Revenues Beat)
Zacks Rank and Stocks to Consider
Currently, Expedia has a Zacks Rank #3 (Hold). Better-ranked stocks in the wider technology sector are Alphabet Inc. (GOOGL - Free Report) and Monolithic Power Systems, Inc. (MPWR - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term expected earnings per share growth rates for Alphabet and Monolithic Power are 16.7% and 17%, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>