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Online Travel Counts on International and Mobile Growth

Posted on Wednesday, Mar 13th 2013

According to PhoCusWright, a travel research firm, global online travel bookings grew 8% over the year last year to $313 billion. The researcher estimates that online travel market sales will grow 7% a year this year. Meanwhile, the online travel sector is focusing on international and mobile expansion to ensure it captures a bigger share of the slowly recovering travel market.

Priceline’s Financials

After announcing the $1.8 billion acquisition of Kayak, Priceline (NASDAQ:PCLN) continued to deliver strong quarterly results. Revenues for the quarter grew 20% to $1.19 billion, in line with the market’s estimates. EPS of $6.77 was ahead of the Street’s target of $6.53. Priceline attributed the strong performance to improved hotel and car rental reservations.

By segment, agency revenues grew 32% over the year to $715 million. Merchant revenues grew from $445 million a year ago to $472 million in the quarter. During the quarter, hotel room nights grew 38% over the year and car rental days grew 37%.

Priceline ended the year with revenues of $5.26 million compared with $4.36 million a year ago. EPS grew 34% over the year to $27.66.

For the current quarter, Priceline projected revenues of $1.21 billion-$1.25 billion, with EPS of $4.90-$5.30. The Street estimates revenues of $1.24 billion, with EPS of $5.17.

Priceline’s International Growth

Priceline is relying on an expanding global footprint. For the current quarter, they project international bookings to grow 35%-42% over the year compared with bookings growth of 30%-37% projected for the entire organization. During the last quarter, international bookings grew 40% to $5.49 billion and contributed 83% of total bookings. International expansion has been driven by investment in, which saw inventory grow 41% over the year to more than 275,000 hotels and accommodations in 180 countries. is also growing beyond the European market and continues to expand in the United States and Asia Pacific. They continued to invest in these markets and recently launched their first TV advertising campaign focused on in the U.S.

Priceline’s stock is trading at $724.12 with a market capitalization of $.12 billion. It touched a ten-year high of $774.96 in April 2012.

Expedia’s Financials

Expedia’s (Nasdaq:EXPE) Q4 revenues grew 24% over the year to $974.9 million, ahead of the market’s expected revenues of $929.0 million. EPS of $0.63 was short of the Street’s estimates of $0.65.

During the quarter, gross bookings grew 19% over the year. Bookings growth was attributed to a 33% increase in hotel room night bookings and a 12% rise in flight bookings. By region, international revenues grew 35% during the quarter to $464 million, while domestic sales increased 15%.

Expedia ended the year with revenues growing 17% to $4.03 billion.

Expedia’s Mobile Focus

Expedia is enhancing their mobile offerings to gain market share. While Priceline is the leader in the segment in terms of revenues, Expedia’s mobile site commands higher traffic. They claim to see 20% of their traffic coming through mobile devices. They recently released the Expedia Hotels & Flights app, which shows hotels and flights in a single app. The app was launched in the U.S. last quarter and in Canada last month. Overall, Expedia’s mobile apps have recorded more than 20 million downloads across 220 countries since launch.

Expedia’s International Growth

To drive growth in international markets, last quarter, Expedia announced the acquisition of European meta-search engine, Trivago. Trivago searches hotel bookings, with access to more than 600,000 hotels across 30 countries and 140 booking sites. The €477 million (~$620 million) acquisition will help Expedia to grow their presence in Europe and compete more effectively with Priceline.

Expedia’s stock is trading at $64.56, with a market capitalization of $8.72 billion. It touched a 52-week high of $68.09 last month.

Orbitz’s Financials

The economic recovery has also helped pull up Orbitz’s (Nasdaq:OWW) performance. Q4 revenues grew 7% over the year to $189.7 million, ahead of the Street’s projections of $185 million. Loss per share of $2.96 was higher than the previous year’s loss of $0.44 per share and missed market projections of earnings of $0.07 per share. Revenue growth during the quarter was attributed to increased hotel volume and ad sales. They ended the year with revenues up 2% to $778.8 million.

For the current year, Orbitz projects revenues of $798 million-$818 million, in line with market expectations of $809 million. Orbitz estimates current quarter revenues of $194 million-$200 million, also in line with the Street’s targets of $197.9 million.

Orbitz’s Mobile Growth

Like their competitors, Orbitz is growing their mobile presence. Last month, they released a new all-in-one iPad app. The freely downloadable app is the first of its kind as it enables consumers to search and book all air, hotel, and rental car reservations in a single app.

The stock is trading at 52-week high levels of $5.19, with a market capitalization of $546.55 million.

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