Few people truly understand what an OTA is. Simply put, OTA stands for an Online Travel Agency and these include Expedia, Priceline and Orbitz, to name a few. Investments into these powerhouses over the past decade, has yielded sophisticated investors hundreds of millions of dollars in profits. The best part is, experts predict OTA’s to be a continued investment into the future, capable of yielding an incredible amount of money in the future.
Today, Expedia (EXPE) trades at over $122 a share and has a total value of over $17.4 Billion. On July 31, 2005, the company fluctuated around $20 a share. That equates to a 510% increase in the company’s value over this past decade of expansion.
The Priceline Group (PCLN), trades on the NASDAQ platform at a whopping $1,265 a share. An investment back in July 31, 2005, also cost about $20 a share. That’s a massive 6,225% increase in the company’s value, through growth and acquisitions over the past decade.
Finally, we come to OTA’s such as Orbitz and Booking.com. Orbitz had revenue exceeding $767 Million in 2011 and was subsequently purchased by Expedia for $1.3 Billion in February of 2015. Booking.com, widely known as the most successful hotel booking platform, was purchased by The Priceline Group for $133 Million in 2005.
The reason experts predict OTA’s to be an investment into the future? The global tourism economy equates to roughly $7.58 Trillion and continues to grow steadily. This is up from $6.03 Trillion in 2006; a 25% increase in the global tourism industry.
There are two ways the smart investor can profit in this sector. The first, invest in the Expedia’s and Priceline’s of the world. There might be a higher premium on the investment, but the safety and income is very secure. Growth however, will be a tad bit slower as opposed to the second option. The second way to make profits, is to invest in the smaller OTA. An investment in either Orbitz or Booking.com would have resulted in equity positions in Expedia and Priceline. This would have likely delivered nice gains to early investors.
There is one thing that is certain, if history teaches us anything about the travel industry, OTA’s are a very lucrative investment into the future; especially in newly developing markets.
Today, Expedia (EXPE) trades at over $122 a share and has a total value of over $17.4 Billion. On July 31, 2005, the company fluctuated around $20 a share. That equates to a 510% increase in the company’s value over this past decade of expansion.
The Priceline Group (PCLN), trades on the NASDAQ platform at a whopping $1,265 a share. An investment back in July 31, 2005, also cost about $20 a share. That’s a massive 6,225% increase in the company’s value, through growth and acquisitions over the past decade.
Finally, we come to OTA’s such as Orbitz and Booking.com. Orbitz had revenue exceeding $767 Million in 2011 and was subsequently purchased by Expedia for $1.3 Billion in February of 2015. Booking.com, widely known as the most successful hotel booking platform, was purchased by The Priceline Group for $133 Million in 2005.
The reason experts predict OTA’s to be an investment into the future? The global tourism economy equates to roughly $7.58 Trillion and continues to grow steadily. This is up from $6.03 Trillion in 2006; a 25% increase in the global tourism industry.
There are two ways the smart investor can profit in this sector. The first, invest in the Expedia’s and Priceline’s of the world. There might be a higher premium on the investment, but the safety and income is very secure. Growth however, will be a tad bit slower as opposed to the second option. The second way to make profits, is to invest in the smaller OTA. An investment in either Orbitz or Booking.com would have resulted in equity positions in Expedia and Priceline. This would have likely delivered nice gains to early investors.
There is one thing that is certain, if history teaches us anything about the travel industry, OTA’s are a very lucrative investment into the future; especially in newly developing markets.
