Merrill Lynch reiterated its earnings estimates on the online travel sector, saying that Hurricane Katrina should only have a small impact to bookings growth and customer service costs.

The research firm estimates a 1% to 2% impact on third-quarter industry bookings growth, based on the size of the travel industry in the Gulf region. The geographic area affected by Katrina represents 1% to 2% of U.S. travel spending, according to the research firm.

Merrill noted that both Sabre Holdings unit Travelocity and Expedia have customer service guarantees for hurricanes. "We believe each company is likely to have contacted thousands of consumers to help with re-routing travel, which could result in higher third-quarter customer service costs," the research firm said.

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