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Online Travel Sites Growing as Usual

Posted on Wednesday, Dec 11th 2013

According to the U.S. Commerce Department, international travel to the country is projected to grow nearly 4% annually from 2013 through 2017. The fastest growth is expected from visitors from China, Saudi Arabia, and the Russian Federation. The World Travel Monitor expects global travel to grow 2-3% this year, with Asia-Pacific seeing the strongest growth. Online travel companies are expanding their service offerings to ensure that they capture a bigger share of this recovering market.

Priceline’s Financials

There is no stopping Priceline’s (NASDAQ:PCLN) massive growth. Q3 revenues were up 33% over the year and 35% over the quarter to $2.27 billion, ahead of the market’s projections of $2.22 billion. EPS of $17.30 was significantly ahead of previous year’s $12.40 and market expectations of $16.15 for the quarter.

By segment, the merchant business grew 6% over the year $620.9 million and agency revenues grew 41% to $1.576 billion. Advertising revenues grew from $3.2 million a year ago to $72.57 million for the quarter.

Among operating metrics, room nights grew 36% over the year and rental car days fell 28%. Sales of airline tickets were also up 5.9% over the year.

For the current quarter, Priceline expects revenues of $1.46 billion compared with the market projections of $1.52 billion. EPS is projected to be $7.80-$8.30, compared with market projections of $8.27 per share for the quarter.

Priceline’s Mobile Push

Priceline continued to offer newer services to attract the mobile device user market. Recently it released a new iPad app feature, Explore. With Explore, users can discover travel options, conduct research on destinations, and book using the single platform. The app is powered by Travelport Flex Explore search technology and offers customized global searches at a local level through an interactive touch-screen map.

The company recently got a new CEO when Jeffrey Boyd stepped down from the position. Darren Houston, CEO of Booking.com, has been promoted to the position of CEO of Priceline.

The stock is trading at $1,188.92 with a market capitalization of $60.14 billion. It touched a 52-week high of $1,198.75 earlier last week.

Expedia’s Financials

Expedia’s (Nasdaq:EXPE) Q3 revenues grew 17% over the year to $1.4 billion, ahead of the Street’s projections of $1.36 billion. EPS of $1.43 grew from $1.32 a year ago and also beat past the market’s projections of $1.36 for the quarter.

Gross bookings for the year grew 19% over the year driven by 27% growth in hotel room nights and an 11% increase in air tickets. During the same period, average daily room rates fell 3% and average airfares grew 1% year-over-year and sales of air tickets grew 11% over the year.

Expedia’s Mobile Growth Continues

Expedia is also seeinggood traction from their mobile segment. Recently, its Hotels.com app crossed the 25 million download milestone. It also released a new app to cater to the growing demand of apps on the Kindle Fire. The app will let users book hotel rooms, check reservations, read reviews, and search for mobile-only deals. With the launch of this app, Expedia now has mobile apps for all mobile operating systems.

Expedia’s stock is trading at $63.20 with a market capitalization of $8.34 billion. It touched a 52-week high of $68.09 earlier this year.

Orbitz’s Financials

Orbitz (Nasdaq:OWW) ended the third quarter with revenues up 11% to $220.9 million and an EPS of $0.11. The market was looking for earnings of $0.13 per share.

For the quarter, gross bookings for the site grew 5% to $2.8 billion driven by increases in sales of hotel and vacation packages.

For the current year, Orbitz projects revenues of $840 million-$850 million, compared with the Street’s projections of $849.4 million.

Orbitz’s Improved Offerings

To attract more customers, Orbitz recently launched an Orbitz Rewards program. Users can sign up free to enroll at the Orbitz Rewards program and earn Orbucks. Rewards members can earn as much as 5% for bookings at Orbitz Rewards hotels and 1% on standalone flights and vacation packages. Unlike several other reward point programs, Orbitz users can earn rewards instantly, thus enabling them to earn Orbucks in one transaction and then redeeming those within a few seconds to make another purchase on the site. Orbitz has also kept the rules of Orbuck simple by equating one Orbuck to one U.S. dollar and doing away with restrictions such as blackout dates.

Orbitz’s stock is trading at $6.95 with a market capitalization of $752.02 million. It touched a 52-week high of $13.26 in November.

TripAdvisor’s Financials

Expedia’s breakaway site, TripAdvisor (Nasdaq:TRIP) is also doing well. Q3 revenues grow 19% over the year to $255.1 million, falling short of the market’s projections of $257 million. EPS of $0.45 was in line with the market’s projected earnings for the quarter.

By segment, revenue from click-based advertising grew 13% over the year to $189.3 million. Revenues from display-based advertising grew 29% to $30.5 million, and subscription, transaction and other revenues grew 68% to $35.3 million.

TripAdvisor’s Tie-up

TripAdvisor continues to push their metasearch business model and recently tied up with Microsoft’s Bing.com to drive growth. As part of the tie-up, TripAdvisor’s content on travel-related searches, including travel reviews, price comparison tools, ratings, and photos, will be featured at the top of Bing search results. This is the first tie up that TripAdvisor has had so far, and it also give Bing the added capability of a hotel price comparison tool.

The market is pleased with TripAdvisor. The stock is trading at $84.98, with a market capitalization of $12.07 billion. It touched a 52-week high of $90.43 in November.

 

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