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Serko shares dragged down by coronavirus concerns

The Serko Ltd (ASX: SKO) share price is down 1.44% today – one of a number of ASX shares linked to the travel sector that have been impacted by concerns around the outbreak of the coronavirus.

Serko shares dropped as low as $4.87 in morning trade before regaining some of their losses to be trading for $5.13 at the time of writing.

The corporate travel management software provider has so far fared much better than some of the other ASX travel shares. At the time of writing, Flight Centre Travel Group Ltd (ASX: FLT) shares are down by 4.01%, Qantas Airways Limited (ASX: QAN) is down 5.14%, Corporate Travel Management Group Ltd (ASX: CTD) is down 7.38% and Webjet Limited (ASX: WEB) is down by a massive 13.93%.

The coronavirus has so far infected 4,000 globally, the vast majority of whom live in China. Four of Australia’s 5 confirmed cases are in NSW, and so far in the US more than 100 people in the US are being evaluated for possible infection.

A number of Chinese cities have placed travel restrictions in an effort to contain the coronavirus, and the US government has provided a recommendation to its citizens to avoid travelling to China.

Over the next month or two, the coronavirus outbreak could have a significant impact on Australia’s travel and tourism sector, particularly if more travel restrictions are imposed on international travel to slow down the spread of the virus.

According to an Australian Financial Review article sourcing Moody’s, tourists from China now account for over 15% of total short-term inbound travellers to Australia, compared to just 4% in 2003.

A closer look at Serko

Serko develops and sells software solutions for the management and administration of corporate travel bookings to travel management companies, including Flight Centre and Corporate Travel. It is headquartered in Auckland, New Zealand.

It is a market leader in its category and has over 6,000 corporations and travel management companies using its platform. According to its most recent update, over US$4.5 billion of transactions were going through Serko’s platforms on an annual basis. It also has a close relationship with industry giant Booking.com.

Serko’s software continues to grow in popularity with businesses and corporate travel bookers, driving very strong revenue growth in recent years. In FY19, the company posted a 28% increase in total operating revenue to NZ$23.4 million.

In FY20, management issued guidance that Serko’s operating revenue growth is expected to be between 20% to 40%.

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Phil Harpur owns shares of Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Serko Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited, Crown Resorts Limited, and Flight Centre Travel Group Limited. The Motley Fool Australia has recommended Serko Ltd and Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Phil Harpur owns shares of Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Serko Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited, Crown Resorts Limited, and Flight Centre Travel Group Limited. The Motley Fool Australia has recommended Serko Ltd and Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Phil Harpur owns shares of Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Serko Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited, Crown Resorts Limited, and Flight Centre Travel Group Limited. The Motley Fool Australia has recommended Serko Ltd and Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Phil Harpur owns shares of Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Serko Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited, Crown Resorts Limited, and Flight Centre Travel Group Limited. The Motley Fool Australia has recommended Serko Ltd and Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Phil Harpur owns shares of Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Serko Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited, Crown Resorts Limited, and Flight Centre Travel Group Limited. The Motley Fool Australia has recommended Serko Ltd and Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Phil Harpur owns shares of Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Serko Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited, Crown Resorts Limited, and Flight Centre Travel Group Limited. The Motley Fool Australia has recommended Serko Ltd and Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Phil Harpur owns shares of Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Serko Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited, Crown Resorts Limited, and Flight Centre Travel Group Limited. The Motley Fool Australia has recommended Serko Ltd and Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Phil Harpur owns shares of Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Serko Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited, Crown Resorts Limited, and Flight Centre Travel Group Limited. The Motley Fool Australia has recommended Serko Ltd and Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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