Stifel Turns Cautious on Online Travel

Just in time for the busiest travel days of the year, Stifel Nicloaus analyst George Askew Thursday turned cautious on the online travel sector. He cut his ratings on Priceline (PCLN), Expedia (EXPE) and Orbitz (OWW) to Hold from Buy.

Askew says the downgrade reflects “weaker economic tends and competitive fundamentals” which he thinks “will impact the leisure traveler and the broader online travel sector in 2008.”

According to Askew, U.S. travel trends have weakened in the fourth quarter in both air travel and hotel occupancy compared to year-ago levels, “foreshadowing potentially lower discretionary income for consumers into 2008.” He adds that “economic weakness is spreading into Europe as well.”

The analyst also thinks competition in the industry is picking up, and that rising air ticket prices are a negative for the group.

Something to think about this weekend while you are waiting in a mammoth airport security line.

Thursday:

• Priceline is down 70 cents, or 0.6%, at $113.67.
• Expedia is down 97 cents, or 3%, at $31.60.
• Orbitz is down 78 cents, or 8.3%, at $8.61.