Expedia shares were up 25% on Friday to a 52-week high, after reporting second-quarter results.
Results were driven by strong domestic and international bookings and strong hotel revenue growth up 16% year over year.
However, softness in European travel affected Expedia’s results.
“Management indicated southern Europe was incrementally weaker in the second-quarter versus last quarter, with noticeable declines in Europe to U.S. consumer travel, though growth overall remains relatively healthy,” wrote Aaron Kessler, analyst for Raymond James in a note to investors.
On Friday Kayak.com went public on the Nasdaq stock market listed under the ticker symbol “KYAK”. Its shares were up 16%, valuing the company at almost $1.3 billion. Kayak offered 3.5 million shares, initially priced at $26, raising $91 million in its IPO.
It was a good day for a tech IPO in a market where the shares of Facebook are down almost 24 percent, after its May IPO, and Groupon has shed more than 60 percent of its value since November.
Between April and June, the company handled 304 million queries, up 33% from the previous year, and earned revenues of approximately $75 million.
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Piper Jaffray analyst Michael J. Olson believes Priceline could hit $1,000 per share in the next 24 months, as the online travel market continues to expand, and Priceline continues to maintain its lead in the international market. He rates Priceline shares”overweight,” and has a $763 price target on shares.
Olson notes that 78% of priceline’s business comes from overseas, and that the company “continues to lead in Europe and has pushed into emerging markets faster than any other online travel bookings site.”
Source & Complete Article: http://www.thestreet.com/story/11466249/1/how-pricelinecom-could-hit-1000.html?cm_ven=GOOGLEN
Shares for Priceline.com Inc. reached a ten-year high during Monday’s stock market trading session, increasing as much as 5 percent in afternoon trading to $572.56 per share. The online travel agency has continued to steadily rise since late 2008, when it was trading at approximately $52 on the NASDAQ.
Priceline.com is a leader in online hotel reservations worldwide and is comprised of four primary brands: Priceline.com, Booking.com, Agoda.com and TravelJigsaw. Although the company could be moderately affected by travel issues surrounding social unrest in Greece this month, most analysts are predicting satisfactory revenue and profit margins when the online firm reports its Fourth Quarter 2011 Earnings on February 27th.
Source and Full Article: http://www.ira.com/priceline-com-inc-pcln-shares-ten-year-highread more
Orbitz Worldwide has a mushy problem.
The popular online travel company, which employs about 800 in Chicago, where it’s based, is not doing poorly: It’s a top agency, with some $11 billion in annual bookings. But it’s not excelling either, compared with industry behemoth Expedia and fast-growing Priceline, for example.
Chart: Orbitz Market Cap vs Expedia and Priceline
The challenge for Orbitz, industry experts say, is to not be relegated to an also-ran in the hypercompetitive industry of booking airfares, hotel rooms, rental cars, cruises and vacation packages.
“The problem is that Orbitz just isn’t a leader in any single category where they can hang their hat,” said Henry Harteveldt, a travel industry analyst with Atmosphere Research Group. “It has no competitive advantages.”
Carroll Rheem, research director at travel market-research company PhoCusWright, sees it similarly.
“They’ve been in a tough position for a while now,” Rheem said, adding that compared with competitors, Orbitz “has been struggling to drive growth.”
Perhaps that perception is why Orbitz CEO Barney Harford, as he sits with a leg tucked beneath him on a leather sofa in his Chicago office overlooking Metratrain tracks, talks about what makes Orbitz different — different today and different in the near future.
Harford, 40, an adventure traveler himself, tells a story of a friend and travel agent who always has great suggestions on where to go.
“He knows me so well that what he’s offering to me is always very exciting,” said Harford, who speed talks in a British accent.
Harford doesn’t want Orbitz to return a long list of available hotel rooms and rates, for example. “You go to any website today and it’s so much a one-size-fits-all experience,” he said.
Instead, he wants Orbitz to gather data about how people use the website and use ultrasmart technology to return recommended hotels, customized for that person.
“We at Orbitz want to use technology to (re-create) the magic of Barney’s travel agent. We want to distill that down and use the insights we learn from the millions of people who shop at our sites every month to delight customers,” said Harford, who has led the company for three years. “It is not something you do trivially. It’s an entire company orientation.
” As I look around at our competition, I don’t think that anyone else has chosen that particular strategic orientation so far. I think we can use that … to develop a competitive advantage.”
Developing an advantage is important. Prices for flights and hotels can vary from site to site, and some, including Orbitz, have a few exclusive offers. But as a general rule, travel shoppers will see similar airfares and room rates as they shop online. So online travel agencies such as Orbitz must give customers additional reasons to book with them versus competitors.
Complete Article & Source: http://www.chicagotribune.com/business/ct-biz-0129-orbitz-20120129,0,1364595.storyread more
In a long-anticipated move, six of the hotel industry’s biggest brands have come together to offer consumers a new channel by which to search and price hotel rooms. Roomkey.com will offer the ability to search, shop and compare hotel rooms from all of the major brands and still allow consumers to book direct.
With Wednesday’s launch of Roomkey.com, the biggest implication for hoteliers is bookings will be pushed direct rather than through intermediaries, which Roomkey.com CEO John F. Davis said will result in commissions “significantly less than that what would be considered market.”
Offering rates and availability direct to Roomkey.com are Choice Hotels International, Hilton Worldwide, Hyatt Hotels Corporation, InterContinental Hotels Group, Marriott International and Wyndham Hotel Group, all of which are listed as “founders” in Roomkey.com’s first news release.
Steve Sickel, senior VP of distribution and relationship marketing for InterContinental Hotels Group, said brands’ direct websites don’t compete on the ability to offer choice of brand. Roomkey.com, however, gives the customer “the choice that they’re looking for and the confidence of booking direct.”
Davis said Roomkey.com was “somewhat” a reaction to Google’s foray into the travel space, but the big difference between Google and Roomkey.com is that Google isn’t being driven by hoteliers; Roomkey.com will operate via a direct connection to hoteliers’ inventory.
Chart: Google Revenue and EBIT Growth
Chart: Priceline Hotel Room Night Growth by Quarter
Both Davis and Lugli stopped short of saying Roomkey.com will allow revenue managers to reduce the amount of inventory given to OTAs or Google, rather it will be another—more cost-effective—channel to assist in finding the optimal channel mix for each individual property. “It doesn’t really change how we advise our revenue managers,” Lugli said. “Roomkey.com is just another tool for us to drive direct business, along with several other initiatives underway, including the relaunch of our direct websites.
Source and Full Article: http://www.hotelnewsnow.com/Articles.aspx/7284/Brands-team-to-launch-Roomkeycom-hotel-search
Can Priceline maintain its torrid pace in 2012? Who would believe, following the implosion of Priceline in 2000, that it would be riding so high today. In 2011 the online travel retailer blew through it’s previous “.com bubble” market cap valuation and now must be the most valuable travel intermediary in the world at a valuation of $23 billion. Revenue has grown at over 40% the past 4 quarters (before reporting 4Q 2011 results) and EBITDA has grown at close to 70% year over year. In 3Q 2011 Priceline also drove operating cashfow of $560 million.
Chart: Priceline, Expedia, Orbitz Historic Market Cap
This amazing growth has been driven by the success of the hotel distribution business in Europe. And the question for 2012 will be whether the sovereign debt crisis in Europe is what finally slows down this juggernaut.
Chart: Priceline US Domestic and International Booking Growth
It will be interesting to see the 4Q 2011 numbers and to hear management’s assessment of the future.
Last year Google jumped into online ticket search when it bought flight data company ITA — a deal opposed by competitors like Orbitz and Kayak — and now The Wall Street Journal says the search giant is again under fire from travel competitors.
Chart: Google Revenue and Earnings Growth
In addition to Google’s top-level placement of its interactive airfare chart in search results, the service cuts out middlemen by linking directly to airline websites. It’s not the first time Google’s been caught in a search imbroglio — Europe has scrutinized Google’s behavior for years, and on December 19th US senators Herb Kohl and Mike Lee urged the FTC to investigate the search giant for antitrust violations.
WSJ says that competitors think Google hasn’t honored its commitment to “build tools that drive more traffic to airline and online travel agency sites” — a concession that Google made to the Department of Justice in order to smooth over its acquisition of ITA. But as Google’s Jeremy Wertheimer notes, the airlines would not give it travel data if it provided booking links to online travel agencies, presumably giving Google no choice in the matter.WSJ points out that Google’s flight search has given a dramatic boost to airlines, which forked over $17.5 billion to travel agencies last year — according to Atmosphere Research, it costs airlines over $11 to process a booking made via a third party, compared to $1 for one made on their own websites. So in either case, Google’s making an impact on a competitor’s bottom line.
Google’s in a precarious position: on the one hand, it’s a dominant search provider that acts as a gateway between users and businesses, and on the other hand, it’s a maker of other services, like travel search, that compete directly with businesses that show up in Google’s search results. Unfortunately for Google, it’s likely that this is only the beginning of a lengthy inquiry — the saga of Microsoft’s antitrust case lasted nearly a decade, and since search is such a deep and systemic part of Google’s core business, it’s arguably in a much more complicated position.
Almost 3% market share separates Expedia from second place Priceline in the list of leading travel websites in the US.
Chart: Expedia Revenue Growth
In the past 52 weeks, eLong share prices have been bracketed by a low of $12.18 and a high of $29.60 and are now at $14.56, 20% above that low price. In the last five trading sessions, the 50-day moving average (MA) has fallen 0.8% while the 200-day MA has remained constant.
Chart: eLong Revenue Growth
The Dow is up 0.6% to 11,592 and the S&P is currently up 0.7% to 1,201.
eLong has overhead space with shares priced $14.56, or 32.3% below the average consensus analyst price target of $21.50. The stock should find initial resistance at its 50-day moving average (MA) of $15.32 and further resistance at its 200-day MA of $17.52.
The top three online travel agencies in India – MakeMyTrip, Yatra and Cleartrip – have secured over two-thirds of the web audience in the country.
The airline top three have 52% share while the destination and accommodation leaders have 31% market share.
Chart: Make My Trip – Air & Hotel Transactions
Most popular travel websites in India for the week ending November 12 2011:
Expedia cites July 2011 custom research performed by PhoCusWright and a conclusion that “98% of participants found that TripAdvisor’s hotel reviews … accurately reflect the experience.”
Chart: TripAdvisor Revenue and Earnings
Other data points from the survey, according to TripAdvisor, included:
- 69% of respondents found TripAdvisor reviews to be “highly or extremely accurate;”
- 92% agreed with the statement that TripAdvisor hotel reviews “help me pick the right hotel for my travel needs;”
- 83% said they usually or always take a look at TripAdvisor reviews before selecting a hotel.
Subject to the Dec. 6 shareholder vote, Expedia expects to complete the spinoff of TripAdvisor, with its $458 million in 2010 revenue and $261 million in 2010 adjusted earnings, by the end of the year.
Revenue also soared by 19 percent to RMB164.3 million (US$25.8 million), compared to US$20.6 million in the third quarter of 2010. The company is also making a US$1.5 million profit this quarter compared to a paltry $0.2 million in the last. All in all, it’s a very impressive leap of for the company’s financial stats. Or perhaps that’s just the trending cycle of the local travel industry. Note that the figure is unaudited, though. So take it with a grain of salt.
Chart: eLong Revenue Growth
This quarter saw a whopping 2.7 million room nights booked on eLong. That’s a 42 percent increase compared to the previous quarter, which recorded 1.9 million room nights booked.
Min Fan, president and chief executive officer of Ctrip.com, said,” Despite a challenging comparison base, Ctrip has continued to outperform the industry with solid growth in the third quarter of 2011.”
Chart: C-Trip Total Revenue
Chinese travel services provider Ctrip.com International Ltd. (CTRP: News ) Sunday reported a 1.6 percent rise in net income for the third quarter, as a 20 percent growth in revenues was set back by decreased margins and a higher tax rate. Earnings per ADS came in ahead of Street estimates as did revenues. The company’s revenue guidance for the fourth quarter is indicated to come in below analyst’s expectations.
Revenues for the quarter grew 20 percent to RMB 974.7 million or $152.8 million from RMB 812.2 million or $121.4 million in the year-ago quarter. Nine Street analysts had a consensus revenue estimate of $150.8 million for the quarter.
Providing its business outlook, the company expects net revenue growth for the fourth quarter over last year of about 15 – 20 percent. This translates to revenues of $137.1 million – $143.1 million. The Street currently expect revenues of $149.4 million for the fourth quarter.