Morgan Stanley: Amazon could disrupt online travel
Mar. 9, 2018 2:30 PM • SA Editor Brandy Betz
Morgan Stanley says Amazon (AMZN +1.3%) could take on the travel industry.
Analyst Brian Nowak: “Online travel has proven immune to Amazon disruption so far. But as we have seen with other categories, that doesn’t mean Amazon won’t try again, and they should. Amazon’s focus on selection/service, pricing, and frictionless payment that drive conversion and stronger user economics also translate directly to travel.”
Nowak estimates that online travel companies spend about $620M for hotel room inventory acquisition, which couldn’t be much for Amazon to pay. The analyst thinks Amazon could make $600M in profits per year if it built an online business half Expedia’s size.
Travel stocks that could move on the news: Expedia (EXPE +1.1%), Tripadvisor (TRIP +0.8%), Booking Holdings (BKNG +1.1%).
Morgan Stanley: Amazon could disrupt online travel - Amazon.com, Inc. (NASDAQ:AMZN) | Seeking Alpha
