Research Published on The Financial Edition

INDUSTRY UPDATE SUMMARY JULY 2010
TRAVELSTATS, July 2010 show abstract
1) The Google acquisition of ITA Software has the potential to shake-up the competitive landscape in online travel 2) With airline load and hotel occupancy up, pricing power will be a key profit driver as we look ahead, 3) M&A activity is on the rise with United-Continental and the battle between Hertz and Avis Budget for Dollar Thrifty.

INDUSTRY OUTLOOK: A BETTER PICTURE EMERGING
FINANCIAL SPOTLIGHT, July 2010 show abstract
Thanks to a quick recovery in business travel demand and strong rate recovery in the air, cruise, and car rental segments, growth for 2010 is defying our expectations.

PRESENTATION: GOOGLE SEALS THE DEAL WITH ITA
PRESENTATION, July 2010 show abstract

PhoCusWright's leading industry analysts discuss Google's acquisition of ITA Software. This Online Event delves into the implications and effects of this game-changing news.

To access the recording of this Online Event, please go to slide 2 of the PDF presentation.

INDUSTRY UPDATE SUMMARY JUNE 2010
TRAVELSTATS, June 2010 show abstract
While volcano-related disruption in Europe clearly took a toll on airline industry performance, it is clear that the travel recovery is gaining steam.

EXPEDIA PUSHES FURTHER INTO VACATION RENTAL VIA TRIPADVISOR-HOLIDAY LETTINGS DEAL
FINANCIAL FLASH, June 2010 show abstract
On June 24, Expedia’s TripAdvisor announced the acquisition of Holiday Lettings, which is reportedly the largest independent UK vacation rental site. While we do not know how much was paid, we can offer a quick look at the size of the business and take a best-guess at the price.

CONTINUED EROSION IN DOMESTIC OTA TICKET TRANSACTION VOLUME
FINANCIAL FLASH, June 2010 show abstract
Domestic ticket transaction volume for the OTAs continues to slow, with data for May actually showing the first decrease since February 2009. Based on the trend through May, we expect ticket volume for the OTAs to be flat with the prior year in 2Q10.

INDUSTRY UPDATE SUMMARY APRIL 2010
TRAVELSTATS, May 2010 show abstract
The travel recovery appears to be gaining steam, with the airlines and hoteliers so far exceeding Wall Street expectations for 1Q10. While absolute levels remain well below the 2007 peak, airline passenger revenue and hotel RevPAR were stronger than expected in the quarter. Upside was primarily driven by a quicker-than-expected rebound in corporate travel volume.

THE SECRET OF PRICELINE'S SUCCESS
FINANCIAL SPOTLIGHT, May 2010 show abstract
Priceline hasn’t always been the industry powerhouse it is today. After being all but forgotten by the financial world in 2002, the company has made an amazing recovery thanks to strong leadership, new retail products and fee cuts.

MONTHLY ONLINE HOTEL SENTIMENT INDEX AND AVERAGE DAILY RATE, 2008-2009
CHART, May 2010 show abstract
Monthly Online Hotel Sentiment Index and Average Daily Rate, 2008 and 2009

SHARE OF ALL POSTED HOTEL REVIEWS ON OTAS BY OTA, 2009
CHART, May 2010 show abstract
Share of All Posted Hotel Reviews on OTAs by OTA, 2009

YEAR-OVER-YEAR GROWTH IN VOLUME OF POSTED HOTEL REVIEWS BY OTA, 2009
CHART, May 2010 show abstract
Year-Over-Year Growth in Volume of Posted Hotel Reviews by OTA, 2009

YEAR-OVER-YEAR GROWTH OF HOTEL ROOM NIGHTS SOLD AND POSTED HOTEL REVIEWS BY OTA, 2009
CHART, May 2010 show abstract
Year-Over-Year Growth of Hotel Room Nights Sold and Posted Hotel Reviews by OTA, 2009

WHAT IS UP AT PRICELINE?
FINANCIAL FLASH, May 2010 show abstract
Priceline reported exceptional growth in 1Q and exceeded the published consensus estimates, so why the massive sell-off? This has been a momentum stock, with investors expecting the company to beat estimates and raise guidance.

THOUGHTS ON THE IMPACT OF A GOOGLE-ITA COMBO
FINANCIAL FLASH, April 2010 show abstract
A number of press reports are indicating that Google may be in talks to acquire ITA Software. ITA provides air search tools and would presumably lead to a significantly improved air search experience on Google. Google is also beta-testing an improved hotel search that lists pricing. The take-away appears to be that Google is making a concerted effort to step up efforts in travel.

1Q10 OTA PREVIEW: HEALTHY TOP-LINE GROWTH, BUT SIGNS OF MARGIN PRESSURE
FINANCIAL QUARTERLY OUTLOOK, April 2010 show abstract
Online travel agency booking performance in 1Q10 should bring convergence in domestic growth rates, continued growth in Europe and a top-line boost overall.

SURVEY SHOWS RATE DECLINES NARROWING
FINANCIAL FLASH, April 2010 show abstract
Our survey of domestic room rate quotes for Starwood and Marriott shows narrowing declines for April. With leisure rate trends improving, corporate demand firming and overall industry occupancy rising, we now expect to see a RevPAR comparison for the companies shift from negative to positive in 2Q10 – one quarter sooner than we forecasted.

INDUSTRY UPDATE SUMMARY MARCH 2010
TRAVELSTATS, March 2010 show abstract
Lodging comps have finally shifted from negative to positive with RevPAR up for the first two weeks of March. Gains are occupancy-led with pricing still down, but the inflection came quicker than we had anticipated. As is the case across the broader economy, the recovery is being led by high-end hotels and key gateway cities.

ONLINE HOTEL PRICING: OCCUPANCY TAXES, FEES AND PRICE PARITY
FINANCIAL SPOTLIGHT, March 2010 show abstract
PhoCusWright put together a survey to assess what has happened with hotel booking fees, how the online travel agencies are pricing relative to chain sites, and whether there is noticeable impact in markets where the OTAs lost occupancy tax cases – and the results are surprising.

FIRST TAKE ON AMADEUS IPO PLANS
FINANCIAL FLASH, March 2010 show abstract
Amadeus is pushing ahead with plans for a first half 2010 IPO, despite Travelport’s recent failed IPO effort. Amadeus may be in a better position than Travelport, however, as it has shown stronger operating performance and appears to be coming at a lower valuation on 2010 expectations.

OTA TRANSACTION VOLUME REMAINS STRONG
FINANCIAL FLASH, March 2010 show abstract
Despite soft domestic site traffic trends in February, we continue to see strong growth in transaction volume trends.

INDUSTRY UPDATE SUMMARY FEBRUARY 2010
TRAVELSTATS, March 2010 show abstract
We finally closed the books on what turned out to be the worst year on record in travel. Domestic sales fell. While we are beginning to see signs of recovery as the economy rebounds, we expect a relatively modest uptick in travel. We project growth with air, car rental and cruise sales up. However, we expect a down year in lodging. Online travel remains a bright spot with OTA bookings expected to be up.

PHOCUSWRIGHT'S TRAVEL AND FINANCE OUTLOOK 2010
PRESENTATION, March 2010 show abstract
This Online Event takes an in-depth look at the financial performance of the travel industry. PhoCusWright analyst Jake Fuller presents an updated outlook for 2010 and reviews key trends impacting the bottom line of travel companies and industry segments.

To access the recorded Webinar, please go to slide 2 of the PowerPoint presentation to access the links.

AIR CONTINUES TO BE A KEY SOURCE OF OTA GROWTH
FINANCIAL FLASH, February 2010 show abstract
The OTAs showed dramatic acceleration in 4Q bookings growth, driven in no small part by a sharp uptick in airline bookings. We will have a lot more on that topic in our 3/3/10 webinar Travel and Finance Outlook, but our January data provides evidence that the trend has continued into 1Q10 as well.

4Q09 PREVIEW: SEEING CONTINUED STRENGTH IN ONLINE TRAVEL
FINANCIAL QUARTERLY OUTLOOK, February 2010 show abstract
While online travel agency volume growth in 4Q09 is expected to be down from the previous quarter, year-over-year gross bookings should be up, and OTAs will see greater inventory access and rising hotel average daily rates in 2010.

MORE GOOD NEWS ON THE OCCUPANCY TAX FRONT
FINANCIAL FLASH, February 2010 show abstract
Following several losses in occupancy tax cases last year, we have seen three wins since December. The tax risk has weighed on leading hotel merchant Expedia, but the favorable developments suggest there may be much less risk than initially feared. In the latest and most meaningful development, a ruling against the online travel agencies (OTAs) in Anaheim, Calif. was overturned on appeal.

INDUSTRY UPDATE SUMMARY JANUARY 2010
TRAVELSTATS, January 2010 show abstract
We have finally closed the books on what turned out to be the worst year on record for travel. Domestic sales fell. While we are beginning to see signs of recovery as the economy rebounds, we expect a relatively modest uptick in travel. We project growth in 2010, with air, car rental and cruise sales up. However, we expect a down year in lodging. Capacity cuts and firming demand should yield pricing increases for airlines and car rental companies, but continued supply growth should yield lower occupancy and further rate declines in lodging. Online travel remains a bright spot, with OTA bookings expected to be up.

TAKING ANOTHER CRACK AT TRAVELPORT VALUATION
FINANCIAL FLASH, January 2010 show abstract
We have taken a couple of cracks at understanding how Travelport’s planned IPO values the company. We are again fine-tuning our thoughts based on a bit more detailed information around the company’s capital structure. The planned IPO would value the equity of Travelport at $3.3-4.0 billion and after factoring in debt and a stake in Orbitz, the total implied value of the enterprise would be $5.9-6.6 billion. That is a bit higher than our last cut, in which we got to a total value of $5.4-6.1 billion. The change reflects a higher net debt figure and adjustment for Travelport’s Orbitz stake.

MORE ON TRAVELPORT...
FINANCIAL FLASH, January 2010 show abstract
With a bit more information now on the details of the planned Travelport IPO, we have fine-tuned our thoughts on valuation. Based on the sale of a 50-60% equity stake, the implied valuation of Travelport would be $5.4-6.1 billion, which compares to the $5.7 billion that it cost to put the business together.

OUR THOUGHTS ON THE TRAVELPORT IPO
FINANCIAL FLASH, January 2010 show abstract
After months of speculation, it is official…Travelport has filed for an IPO. From what we can see, the deal would put a total value on the business within 5% of its initial purchase price, despite a substantial erosion in profitability in the downturn and the potential for a hit in the 2011 airline contract renewals. The ability to achieve that valuation will likely be critical as Sabre explores a potential IPO.

SEEING UPWARD MOVEMENT IN FORWARD HOTEL RATE CURVE
FINANCIAL FLASH, January 2010 show abstract
While the hotel pricing environment remains very difficult and likely will be throughout 2010, we are seeing signs that trends are improving and exceeding low expectations.

Monthly Publication
A topical feature article will be featured each month. Themes will include:

Travel distribution economics (booking fees, GDS-Airline deals, commission structures and more)
Trends in capital markets (M&A, funding and investments, IPO outlook, valuation implications)
Industry pricing outlook (airline and hotel pricing analysis and forecasts)
Financial analysis (profit margins, cash flows, balance sheets)

Monthly Data Feed
An aggregation of travel industry metrics in one convenient place, overlaid with analyst commentary on relevance and projections that put you ahead of the curve.

Key demand factors include: air traffic, airfares, hotel room nights, average daily rates and online travel site traffic.

Key supply side factors include: air capacity, airline load, hotel construction as well as proprietary surveys tracking trends in room rates and providing cross-channel price comparisons.

Quarterly Publication
A quarterly review of financial results, trends and projections for publicly traded online travel agencies. Topics will include competitive dynamics, top-line analysis, profitability and how recent performance impacts the outlook for the coming quarter and year.