According to Expedia's (EXPE 3.92%) recent vacation study conducted by Harris Interactive, Americans are more wired for work than play. There are a variety of reasons for this trend, which will be covered below. We'll also take a look at how employed Americans compare to employed citizens in other countries, what Expedia, Priceline (PCLN 3.72%), and Orbitz Worldwide (NYSE: OWW) are doing to attract travelers, and which one of these three companies is likely to present the best investment option.
Overworked and under-vacationed
Expedia's "Vacation Deprivation Study" has revealed that Americans average 14 available vacation days, but only make use of 10 of those available days. This is due to the following reasons:
- Accumulation of Vacation Days for a Bigger Trip in the Future (25% of those surveyed)
- Complex Scheduling (22%)
- Paid for Unused Vacation Days (18%)
- Affordability (16%)
- Failure to Plan (15%)
- Not Wanting Important Work Decisions to Be Made in Their Absence (8%)
- Mean Bosses (8%)
The French fall on the opposite end of the spectrum, averaging 30 available vacation days and using all of them. What's most interesting here is that while Americans see vacation as a luxury, not a right, 90% of French workers feel vacation deprived. Below are the percentages of workers in other countries that feel vacation deprived:
- Italy: 83%
- Spain: 78%
- Germany: 74%
- Ireland 49%
- United Kingdom: 47%
- Malaysia: 47%
- Sweden: 44%
- Denmark: 39%
- Mexico: 38%
- Norway: 17%
Americans aren't the most wired for work over vacation. In Japan, the average employee has 18 available vacation days, but that average employee only takes advantage of seven of those days.
At least Americans don't compare to workers in many other countries when it comes to bringing their work on vacation. The following list represents the percentage of a country's workers who check their email or voice mail while on vacation:
- India: 94%
- France: 93%
- Thailand: 92%
- Malaysia: 91%
- Mexico: 91%
- United States: 67%
- Great Britain: 46%
- Germany: 43%
Another positive is that American workers are above the global average of 65% for bosses that support vacations:
- Norway: 88%
- Sweden: 80%
- New Zealand: 76%
- United States: 76%
- Germany: 49%
- Thailand: 47%
- South Korea: 44%
- Italy: 44%
Planning your next vacation
Now that you realize you work too much, it might be time to plan a vacation. If you choose to use Expedia.com, you will find daily deals and consistently updated promotions. This keeps potential travelers coming back to the site.
If you didn't like to use Priceline in the past because of its negotiating theme, you might like it now thanks to its Express Deals, where you don't have to bid on anything, you can save up to 45% on hotels, and you don't waste time.
If you opt for Orbitz Worldwide, then you might want to check out its rewards program, which gives you up to 5% on hotels, plus another 2% when you use mobile apps on iOS or Android. You can also earn 1% on flights and packages. Most importantly, you will enjoy immediate rewards.
Investment potential
I recently wrote an article comparing these three companies, and the top-line performance comparison was for a one-year time frame. In this case, let's take a look at the bigger picture -- a five-year time frame:
PCLN Revenue (TTM) data by YCharts
Priceline is the clear leader. The same can be said for the bottom line (actual diluted earnings per share, not percentage changes):
PCLN EPS Diluted (TTM) data by YCharts
Currently, Priceline sports a profit margin of 27.99%, whereas Expedia and Orbitz Worldwide have profit margins of 3.15% and negative 18.45, respectively. Consider profit margin trends over the past five years:
PCLN Profit Margin (TTM) data by YCharts
Only Priceline has been heading north, slowly but steadily.
Furthermore, Priceline's $6.58 billion cash position (versus $2.31 billion in long-term debt) allows for inorganic growth potential. Comparatively, Expedia has $1.81 billion in cash versus $1.25 billion in long-term debt. Orbitz Worldwide has $160.36 million in cash versus $447.70 million in long-term debt.
The bottom line
Priceline is still best of breed. Orbitz lags its peers in every area. Therefore, Priceline offers the most potential, and Orbitz Worldwide offers the least potential. What might go overlooked here is that if Priceline wasn't in the picture, Expedia would look appealing. Plus, Expedia yields 1%, whereas Priceline doesn't offer any yield. However, Priceline is in the picture, and a 1% yield isn't a big enough selling point for Expedia to supplant Priceline as the top investment option.
