Merrill Lynch has maintained a "neutral" rating on the online travel industry, saying there is "plenty of industry growth to come", according to a media report.

Published: 13 Nov 2005

Merrill Lynch has maintained a "neutral" rating on the online travel industry, saying there is "plenty of industry growth to come", according to a media report.

"The research firm cited Travelocity as having the best U.S. net revenue and operating margin trajectory in the group, and reiterated a "buy" rating on the parent company, Sabre Holdings Group," according to Reuters. "For full-year 2005, Merrill estimates 18% U.S. online agency bookings growth and 43% international online agency bookings growth, consistent with prior estimates for 19% and 43% growth entering the third quarter," adding the report.

Further, as per the report, the research firm predicts international market share for Expedia at 41%, between 20% and 25% for Travelocity, 7% for Cendant and 5% for Priceline.com. Merrill maintained "neutral" ratings on Expedia and Priceline.com. For 2006, Merrill expects "plenty of industry growth." The research firm estimates total online bookings penetration in the U.S. to increase to 34% in 2006, supplying 20% online travel bookings growth.

As per the information available, Merrill Lynch estimates included in the report show that direct travel suppliers will have a 54% share and online travel agencies, a 46% share of the $62 billion US online travel market in 2005.