Travel Stocks Struggle With Terror

Watching the news nowadays, it seems as if we’re inundated with one senseless attack after another. The world collectively mourned after the tragedies in France, which began on November 13, 2015, when members of the Islamic State (ISIL) attacked various, highly populated spots in Paris. Shortly before that, on October 31st, ISIS bombed a Metrojet Flight in Egypt’s Sinai Peninsula, killing all 224 on board. With every senseless tragedy that occurs, people become frightened, and travel stocks struggle with terror.

A prime example can be found in Expedia’s [EXPE] stock, which was sitting as high as $129 a share, just one day prior to the terror in Paris. November 17th, just four days later, the stock traded as low as $119 a share, almost 8% lower. Likewise, with The Priceline Group [PCLN], the stock traded as high as $1,333 a share on November 12, 2015, then plunged as low as $1,230 only four days later… Another plunge of nearly 8%. Even Sabre [SABR] fell from a high of $29 on November 12th, to $27 on the 16th.

Even while travel stocks struggle with terror, amidst Sabre’s decline, the Company had the wherewithal to acquire the Trust Group, a reservation, revenue management and hotel marketing provider – having a deep presence in Europe, the Middle East, Africa and the Asia Pacific. The acquisition is expected to close in the first quarter of 2016, with Sabre paying approximately $154 Million to Battery Ventures, owner of the Trust Group. Likewise, Oveedia, which is a member Sabre’s $7 Billion Travel Network Family, will have also added is reach in these regions, following Sabre’s successful integrations of the Trust Group’s worldwide solutions.

Travel stocks struggle with terror even further as the U.S. Department of State has issued a worldwide travel alert, which was updated on November 23, 2015. The alert, which starts by saying ‘The State Department alerts U.S. citizens to possible risks of travel due to increased terrorist threats’, does not expire until February 24, 2016.

There is one thing that remains certain – with the uncertainty that surrounds senseless terror, many people will be anxious when traveling anywhere until the cessation of the State Department’s warning, on February 24, 2016.  Regardless however, fortunate for Oveedia, travel interest to select areas of Central America and the Caribbean, continue to grow. With the Company having a first mover advantage’ within this region, Oveedia has a strong possibility of faring well as most travel stocks struggle with terror.