This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Expedia Dabbles in Politics to Get Americans Paid Vacation Days and Boost Its Sales

Stocks in this article: EXPE PCLN

NEW YORK (TheStreet) -- Mandatory paid vacation days -- a common feature for workers oversees -- do not exist in the United States. As a  result, Americans enjoy, on average, less holidays than the rest of the world -- a concern for the travel industry.  Hotels.com, one of several brands owned by Expedia (EXPE - Get Report), has taken on this issue. It launched a petition about a week ago. Its goal is to get 100,000 signatures and gain some customers along the way.

Hotels.com's  Vacation Equality Project needs those signatures within a 30-day period, the threshold set by the White House under its We the People online petition platform. Without those signatures, the administration will not have to respond. As of Friday morning, the petition had only 3,121 signatures and another 21 days left. If signatures maintain this pace, the petition will fall short of its target.

Whether Americans deserve paid vacation time at the expense of companies is an argument left for others to debate. Hotels.com is winning through the simple potential of changing the legislation and creating awareness. It found a weakness in the travel market, exposed it, and is ready to capitalize on it. Perhaps investors should be ready to capitalize on Expedia.

Read More:
Is It Safe to Fly Malaysia Airlines?

Expedia shares have gained 17% so far in 2014 and more than 25% in the last 12 months. Despite trading at close to its 52-week high, Expedia shares are cheap when compared to rival Priceline (PCLN). Expedia was trading at $79.58, down 32 cents, while Priceline was trading at $1,225.98, down $10.75 near the Friday close. Both companies have high price-to-earnings ratios. Expedia trades at a P/E of 29.79, while Priceline has a P/E of 31.47. Priceline's EV/sales and price/book value are 8.06 and 8.64, respectively. Expedia's EV/sales is 1.83 and it has a price/book value of 4.72.

Analysts forecast Expedia's revenue to grow 18% in fiscal 2014 and 13% in fiscal 2015.

For Hotels.com, more vacation time for more American workers could be an income boost.  With more than 290,000 listed properties on its travel site, Hotels.com is counting on more vacation time equaling more revenue. That would likely translate into longer hotel stays, more flights and cruises -- all potential winning scenarios for Hotels.com and Expedia. Even without a change in legislation, Expedia and its brands are gaining sympathy along the way. After all, who does not like paid vacation days?

The petition uses comparisons to other countries to convince American workers they need paid time off. Europeans have an average of 20 vacation days, not including public holidays. Countries like Brazil and Sierra Leone offer 30 and 18 paid days, respectively. In the United States, though, 28 million people, or 1 in 4 working Americans, go without paid time off, Hotels.com states.

Expedia has a growing presence in the travel market, with brands like Expedia, Hotels.com, Hotwire, Trivago, Carrentals.com and eLong.

In the first quarter, Expedia saw a 24% increase in total room nights. Revenue rose 19% year on year driven by growth in hotel, advertising and media as well as air ticket revenue. Domestic gross bookings growth of 35% outpaced the 21% gain seen by international bookings.

Expedia also launched in the first quarter a marketing campaign for Hotels.com, which will increase awareness going forward. A new tagline of Hotels.com: The Obvious Choice and the introduction of Captain Obvious, a personality for the brand, highlighted the quarter.

 
Read More: Why Facebook's Blowout Earnings Are Even More Impressive Than You Thought

At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.




Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs