Travel & Tourism

U.S. virus bailouts require good instructions

11 Mar 2020

Donald Trump wants to help airlines weather the hit from Covid-19. Unlike cruise lines, also on his list, that makes sense. Some carriers, like Delta and United, may not need aid. But taxpayer rescues can work with the right structures. Breakingviews offers a bluffer’s guide.

Oyo is not wasting the WeWork crisis

5 Mar 2020

The Indian hotel room provider is cutting 5,000 jobs, including half its China staff, and focusing on profitability and governance. Slower growth might deflate a $10 bln valuation. But it highlights the more grounded new look of Masayoshi Son’s SoftBank empire.

Virgin’s galactic valuation

26 Feb 2020

Richard Branson’s space-tourism enterprise is worth nearly $7 billion. That’s high even based on the company’s rosy projections, and it’s stratospheric on more realistic assumptions.

Virgin Galactic’s valuation looks stratospheric

26 Feb 2020

The space-tourism outfit is up eightfold in enterprise value in three months to $7 bln. That’s some 25 times the company’s forecast EBITDA in 2023. A more realistic outlook makes that multiple, and the valuation, look hyperstretched, as a new Breakingviews calculator shows.

Unizo check-in borders on being inhospitable

25 Feb 2020

Bids for the Japanese hotelier have reached $1.9 bln, and could go even higher. The company is already loaded with debt, meaning that any buyout will require some serious housekeeping to generate a solid return. Blackstone, Lone Star or Fortress may be sweating their equity.

China shocks to global tourism have room to grow

5 Feb 2020

Travel curbs on the virus-hit country have shaken airlines and hotels. Even with a fast recovery as with the SARS epidemic, it’s a reminder of China’s vital role in the $1.7 trln tourism market. With millions more set to travel, any future jolts will only be more brutal.

Wuhan virus will shape China’s smart city vision

24 Jan 2020

The metropolis of 11 mln is under quarantine. Big investments in healthcare, AI and even surveillance led by the $50 bln Hikvision and other giants could help curb future contagion risk. That might compensate for less tractable problems: human error and institutional weakness.

Viewsroom: China’s latest viral threat

23 Jan 2020

The outbreak of a contagious disease before the Lunar New Year holiday evokes memories of SARS’ human and economic toll in 2003. Beijing’s swift reaction this time, imposing travel bans on five cities as 18 died, is encouraging. Plus: the cost of the UK royal family’s new schism.

Macau’s makeover comes at a cost for casinos

20 Jan 2020

Authorities are desperate to diversify the $55 bln economy beyond betting and will use their clout in 2020 to force Sands and Wynn to invest more in theatres and malls, away from betting tables. Odds on it will sink profit margins: the new breed of visitors won’t be big spenders.

Hong Kong’s luxury icon sells new retail model

15 Jan 2020

Chow Tai Fook plans to close up to 15 of its local stores. The $11 bln jeweller’s decision comes at a moment of calm after months of protests and before a key shopping holiday. That suggests a recovery is distant. Tapping mainland shoppers elsewhere is the new way forward.

Hong Kong’s stores could use some Chinese medicine

11 Dec 2019

Cosmetics chain Sa Sa has lost some 40% of its value this year. Months of protests have exposed existing ills, not least a reliance on Chinese visitors. With the economy ailing and tourists staying away, high-street retailers will have to find shoppers in the mainland and beyond.

Expedia’s double boot is swift, harsh and helpful

4 Dec 2019

The travel site’s CEO and CFO are both out after a disagreement with the board over strategy and a brutal profit warning last month. The tumult is bad but the message is good: Chairman Barry Diller thinks the company can do better. His track record elsewhere bolsters his case.

Airbnb makes a virtue of basic housekeeping

7 Nov 2019

Boss Brian Chesky is putting in checks and balances to root out bad users before the home-sharing service potentially lists next year. Better controls equal more trust, albeit with higher costs. It sounds like common sense. Among tech’s ivory towers Chesky is an outlier.

Chinese consumers are on a worrying staycation

10 Oct 2019

Revenue from domestic tourism during the Golden Week break rose 8.5% year-on-year, the slowest pace in nearly two decades. Fewer ventured abroad. The flagging economy needs shoppers, but a weak currency, tariffs and the fading impact of tax cuts will keep purse strings tight.

Baidu’s Ctrip sale leaves room for risky wandering

27 Sep 2019

The $37 bln web giant is offloading nearly a third of its holding in China's largest travel agency for $1 bln. Ctrip stock has shed over 30% since Baidu came in; still, thanks to an initial share swap, boss Robin Li can book a profit. Now he needs to spend on more than buybacks.

Viewsroom: WeWork overhaul won’t be enough

26 Sep 2019

Adam Neumann lost his CEO role and control of the shared-office provider after its valuation plummeted in preparation for a now-postponed IPO. But WeWork’s business model remains a problem. Plus: Thomas Cook’s collapse hits China’s Fosun. And: parsing financial climate pledges.

Fosun books early return flight from UK holiday

24 Sep 2019

Iconic travel company Thomas Cook collapsed after Downing Street declined a bailout, leaving hordes of tourists stranded. Fosun Tourism’s 450 mln pound rescue attempt, which might have salvaged its stake, stands abandoned. Shareholders in the Chinese company may feel the same.

Thomas Cook crash is dry run for Brexit failures

23 Sep 2019

The UK government refused a 150 mln pound bailout of the travel firm, citing moral hazard, but will fund the repatriation of thousands of stranded Brits. A chaotic departure from the EU will leave more businesses ailing. That will test Prime Minister Boris Johnson’s tough stance.

Airbnb may be everything WeWork isn’t

19 Sep 2019

Both space-sharing pioneers have been valued at more than $30 bln. Yet Airbnb’s asset-light business needs little capital while reaping obvious economies of scale and network benefits. That should help its public listing, planned for 2020, succeed where WeWork’s is failing.

Green fears could keep UK high-speed rail on track

23 Aug 2019

The so-called HS2 link from London to northern England may end up 29 billion pounds over budget. That eats into benefits of the bullet train’s potential to narrow Britain’s troubling north-south divide. Yet concerns about global warming point to the project maintaining momentum.