July 13, 2018
Latin American travelers opt to explore own countries
Expedia released new research on Latin American travelers, which spotlights the behaviors, preferences and influences of travelers from Argentina, Brazil, and Mexico.Read more
Amazon's advertising spend per transaction could be meaningfully lower than OTAs Booking Holdings and Expedia thanks to Amazon's proven ability to drive repeat and internal traffic on its platform.
There's a large barrier to entry in online travel for most companies due to the cost of global hotel supply. Nowak estimates Booking Holdings and Expedia spend roughly $620 million each on their hotel supply annually, but that number pales in comparison to the $6.4 billion Amazon is spending on streaming video content in 2018.
If Amazon is able to build a successful online travel business, Morgan Stanley analyst Brian Nowak says it could provide a huge boost to the company's bottom line.
"Our sensitivity table shows that if AMZN could build an online hotel business even 50 percent the size of EXPE's hotel business ... it would add roughly $600 million to operating profit," Nowak says. He says a more aggressive approach and/or a more efficient ad spend could bump that operating profit as high as $1.5 billion annually.
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Read also "Amazon could disrupt online travel industry next, Morgan Stanley says"
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