Ally Schmidt

The last two years have been marked by turmoil for Starwood Hotels (HOT). Starwood’s properties include brands like the Sheraton, Westin, St. Regis, and W hotels.

The Marriott–Starwood deal holds immense significance for Marriott International because the combined entity of Marriott International and Starwood Hotels and Resorts Worldwide would create the world’s largest lodging company.

In this series, we will discuss why Starwood (HOT) decided to put itself up for sale, how a merger with Starwood would benefit either Marriott or Anbang, and who could probably win this takeover tussle.

In February 2016, the airline capacity of the eight major airlines exceeded their traffic growth by an average of 2%.

The airline industry is a capital-intensive industry with heavy investments required in building infrastructure, fleets, and their maintenance. As a result, airline stocks generally have high levels of debt on their balance sheets.

Spirit Airlines has historically followed a low-cost structure, and took numerous measures to keep its cost components the lowest in the industry.

Boeing (BA) uses program accounting, a technique that allows the company to spread out its huge manufacturing costs over time by cutting the cost per plane in the early stages of a project, and smoothening profit margins over time.

United Parcel Service (UPS) has been a consistent dividend payer for the last 20 years.

Expedia’s EBITDA margins are expected to increase to 19% in 2016 and then rise to 21% in 2017. As a result, EBITDA growth is expected to increase to 42% and 27% in 2016 and 2017, respectively.

For the last year, Expedia’s gross bookings increased 28% after increasing 16% for the two years before that. For the first nine months of 2015, gross bookings have increased 20%.

For 1Q16, Delta Air Lines (DAL) expects to see its operating margins improve to 18%–20%, backed by solid cost savings and lower fuel prices.

Carnival’s (CCL) competitors include Royal Caribbean Cruises and Norwegian Cruise Line. CCL forms 3.9% of the WBI Large Cap Tactical Value Shares (WBIF).

TripAdvisor (TRIP) is a travel site, which means its business depends on getting loads of traffic that it can later monetize.

What are the key revenue drivers of TripAdvisor’s (TRIP) click-based advertisement revenue? We can break them down into a few key metrics.

Since all the content provided on TripAdvisor’s (TRIP) website is free and predominantly user-generated, the company shifted from earning on a per-query basis to a cost-per-click model.

In 1999, TripAdvisor founders Stephen Kaufer and his wife, Caroline Lipson Kaufer, decided to take a vacation. The vacation would have turned out to be a disaster if they hadn’t decided to check out the place online.

The hotels segment is TripAdvisor’s main segment, contributing about 82% of the company’s total revenues.

Priceline has mostly followed the agency model, where hotels and other service providers list their own offers and pay Priceline a commission for every transaction.

Overview In 2014, Priceline (PCLN) saw a 24% year-over-year revenue growth, primarily boosted by strong advertising revenue growth. It is expected to reach $9.24 billion in sales by the end of 2015, versus $6.52 billion in forecasted sales for its competitor, Expedia (EXPE). Priceline has seen robust growth in revenue over the years after the […]

Of the two most popular business models in the online travel agency industry, Expedia uses both the merchant model and the agency model.

Expedia is one of the world’s largest online travel companies. Its strong global presence boasts more than 150 booking sites in over 70 countries.

United Parcel Services (UPS) announced its agreement to acquire Coyote Logistics. It’s a Chicago-based logistics firm with contract carrier companies.

OTAs have done well in the past few years. They’ve ridden on the surge in the travel industry because more people are travelling for business and leisure.

Southwest is known to be the pioneer of low cost travel in the industry. Its 42-year record of profitable operations is enough to prove the success of the company’s business model.

Smaller ETFs that provide exposure to the courier services industry include Buyback Achievers (PKW), the First Trust Capital Strength ETF (FTCS), and the MSCI Industrials Index ETF (FIDU).

The US has witnessed the emergence of a number of regional carriers such as OnTrac and Eastern Connection, which are providing cheaper, faster delivery options.

Over the past few years, the global courier services industry has managed to recover from the global economic slowdown.

The e-commerce industry is poised to grow rapidly in the future. With this growth will come the need for package delivery.

Some of UPS’s key strengths that keep it ahead of its competitors include an integrated global network, leading-edge technology, a strong brand name, a strong culture, and impressive financials.

In the recent past, there has been a surge in the use of e-commerce across the globe. The impact of this new form of commerce has been felt in each and every industry.

Standard courier services involve collecting the parcels, sorting the parcels, and transferring the parcels to the closest depot to the delivery location.

The US courier and parcel delivery services industry consists of about 7,500 companies both large and small, which have combined annual revenue of about $90 billion.

The growth in e-commerce among various economies across the globe has helped shape the highly competitive courier service industry that we know today.

UPS has the highest sales among its peer group with $58.2 billion in sales in 2014. Rival FedEx wasn’t far behind with $47.45 billion in sales.

United Parcel Service is the world’s largest package delivery company and a leading global provider of specialized transportation and logistics services. It forms the largest holding of 7.6% in IYT.

United Parcel Service (UPS), originally called American Messenger Company, was founded in 1907 by 19-year-old James E. Casey with $100 borrowed from a friend.

FedEx was formed with a vision to change the way delivery services worked prior to 1971. It established a new industry and it has been leading its peers since then.

FedEx has been in the marketplace for over 40 years. It has established a huge network spread across more than 220 countries and territories worldwide.

Salaries and employee benefits form the highest cost for FedEx. They account for ~36% as a percentage of revenue. Salary costs rose 6% for fiscal 2015.

FedEx’s (FDX) financial performance during the last few years has been extraordinary. It successfully bounced back from the recessionary downturn.

By 1983, FedEx (FDX) had become the strongest delivery business in the nation. It started a string of acquisitions in order to grow more.

FedEx has assembled a portfolio of solutions, from express and freight forwarding to critical inventory logistics, that can solve any global commerce challenge.

The idea behind FedEx (FDX) started off as a term paper by undergraduate Frederick W. Smith in 1965 at Yale University. The company started operations in 1973.

Currently, FedEx is the global leader in the express delivery market. It offers delivery to and from individuals and businesses. It has various business units.

Capacity utilization has improved from the lows of ~57% in the 1970s to ~76% in 2014 and 81.88% in year-to-date 2015.

A strengthening dollar led to improved profitability for US airlines in 1Q15 while subduing profitability for non-US airlines. This further increased the industry’s performance gap across the globe.

Southwest Airlines posted excellent financial performance metrics in 1Q15, including ~6% growth in available seat miles.

UTC offers some products and services through UTC Building & Industrial Systems, a combination of two segments, Otis and UTC Climate, Controls & Security.

Revenues for Raytheon’s Space and Airborne Systems segment declined in 2014 by 5%. This led to lower income and slight growth in margins.

Boeing is the world’s largest aerospace company. It is the largest commercial jet manufacturer in the US and the world’s second largest behind Airbus.