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Online travel-booking sites Priceline Group Inc. and Expedia Inc. fell to their lowest in at least a month amid concerns that Friday’s deadly terrorist attacks in Paris could damp European tourism.
Priceline shed 4.2 percent to $1243.06 at 10:58 a.m. in New York after dropping as much as 4.9 percent. Expedia lost 2.6 percent to $122.01, paring an earlier decline of 3.6 percent.
“It’s going to have an impact on travel to Paris,” James Cordwell, a London-based analyst with Atlantic Equities LLP, said. “Any fears around further terrorist-related attacks is going to impact consumer demand for travel as well.”
The drops follow a slump in stocks of European transport and travel companies, including Accor SA, Europe’s top hotel operator, which fell as much as 9.3 percent before recovering almost half of that, and Air France-KLM Group, which closed down 5.8 percent. France, the world’s biggest vacation destination according to the World Tourism Organization, has closed tourist sites and increased border security in the wake of attacks that killed at least 129 people at restaurants and a concert hall in the capital on Nov. 13.
The latest tragedy adds to a growing list of events that could adversely impact travel decisions. Terrorism in Tunisia, a bombing in Thailand and the downing of a Russian passenger jet in Egypt had slightly negative impacts on Priceline’s third- quarter earnings, Chief Executive Officer Darren Huston said on a Nov. 9 conference call.
“People lose security when they see negative headlines. And when the headlines are generally not negative, they don’t even have to be positive, then people will travel,” Huston said.
The prospect of Marriott International Inc.’s $12.2-billion deal to buy Starwood Hotels & Resorts Worldwide Inc., giving the hotel company more negotiating power with Expedia and Priceline, could be weighing on those stocks as well, Cordwell said.
The declines could be short-lived. A drop of about 5 percent for Priceline in response to the attacks is an overreaction, Cordwell said.
“The impact here is probably going to be, if anything, a matter of weeks in terms of its impact on demand,” he said, “assuming we don’t see any further incidents.”
This article was written by Gerrit De Vynck from Bloomberg and was legally licensed through the NewsCred publisher network.