Weekly Online Travel Agency Notes: Priceline, Expedia, TripAdvisor

PCLN: Priceline Group logo
PCLN
Priceline Group

This week the services of the top three online travel agencies (OTAs) Priceline (NASDAQ:PCLN), Expedia (NASDAQ:EXPE), and TripAdvisor (NASDAQ:TRIP) were all incorporated in some form on the Apple (NASDAQ:AAPL) Platform. While the reviews from Priceline’s Booking.com and TripAdvisor will be available on Apple Maps, Apple Watch will incorporate Expedia’s Hotels.com and also the TripAdvisor application.

TripAdvisor has acquired yet another online restaurant reservation platform, Portugal-based Best Tables. Expedia has changed its segment reporting structure and has announced plans to move its headquarters to Seattle by 2018.

Below we give a quick rundown on the most notable events in the last week related to these companies.

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See Our Complete Analysis for These Companies Here

Priceline

Priceline (NASDAQ:PCLN), the word’s largest online travel company (in terms of revenues) and home to websites including Booking.com, priceline.com, KAYAK, agoda.com, rentalcars.com and OpenTable, has announced that its Q1 2015 earnings call will be held on May 7, 2015. (Read Press Release).

Priceline’s Booking.com, the world’s biggest accommodation site, recently announced The Booking’s Best Awards – the award that goes to 260 accommodations out of a possible 600,000. The winners are decided by over 40 million customer reviews. The top three winning hotels for Booking’s Global Top 10 were: Casa Roma Luxury Apartment in Italy, Hyades Mountain Resort in Greece, and Breitner House in the Netherlands. (Read Press Release).

Apple Maps has started incorporating TripAdvisor and Priceline’s Booking.com reviews for selected hotels on its platform. Reviews can be seen with the help of drop pins on the map. Drop pins will also display customer photos from TripAdvisor and Booking.com. Apple Maps already had similar features from Yelp (NYSE:YELP) present on its platform. The addition of Booking.com and TripAdvisor, the most popular review sites for European and American travelers, respectively, is expected to increase the mass appeal of Apple Maps. [1]

Our price estimate of $1036 for Priceline is 14% lower than the current market price. We expect the company to report revenues of approximately $10 billion and net income of $3.16 billion for FY 2015. Our GAAP and non-GAAP diluted EPS estimates stand at $57 and $60, respectively. These estimates are almost in line with the consensus estimates. Priceline’s stock saw 3.8% growth over the week through Monday.

Expedia

Expedia (NASDAQ:EXPE) has announced a change in its segment reporting. The company realigned its reporting segments effective January 1, 2015. The current segments are: Core OTA, trivago, Egencia, and eLong. Expedia recast its previously issued financial statements for 2013 and 2014; however, gross bookings, revenue, and adjusted EBITDA for the previously reported period remain unchanged. (Read SEC filing).

On April 10, Expedia’s hotel booking platform, hotels.com, announced its first Apple Watch compatible application. As a result, Apple Watch users will be able to book nearby hotel deals, view upcoming deals, and locate their hotels through GPS. Users will have full access to hotel booking details such as address, photos, reviews, and ratings. The application will also provide directions to the hotel and notify users about the check-in and check-out timings. (Read Press Release).

On April 2, Expedia announced the plan to move its new headquarters to Seattle by 2018. The company has planned to purchase Amgen’s multi-building, waterfront campus for the same purpose. (Read Press Release).

Our price estimate of $90 for Expedia is about 10% below the current market price. We forecast the company to report revenues of approximately $6.6 billion for FY 2015. Our GAAP and non-GAAP diluted EPS estimates stand at $3.60 and $4.70, respectively. These estimates are in line with the consensus estimates. Expedia’s stocks witnessed slight growth of around 1.5% over the week through Monday.

TripAdvisor

TripAdvisor (NASDAQ:TRIP) continues its tryst with European restaurant booking websites with the acquisition of Portugal-based Best Tables. Best Tables also operates in Brazil and has a database of 1,200 bookable restaurants. The details of the acquisition are yet to be disclosed. [2]

TripAdvisor acquired LaFourchette, the leading online restaurant reservation systems in France and Spain, in May 2014. In Q4 2014, TripAdvisor acquired mytable and restopolis in Italy, and Iens in The Netherlands. Other than the countries where these entities belong, TripAdvisor’s restaurant inventory (as a result of these acquisitions) now spans across France, Spain, Switzerland, Belgium, Turkey, Sweden and Denmark, making it the market leader in the European online restaurant reservation domain.

As a consequence of these acquisitions, restaurant booking activities have increased by four times on the TripAdvisor platform. TripAdvisor is currently re-branding its restaurant platform as TheFork. The company plans on expanding TheFork’s reach to newer markets over the next 3 to 5 years. [3]

Along with incorporating TripAdvisor reviews on the Apple Maps platform, today TripAdvisor announced the launch of the TripAdvisor Apple Watch application, available at the App Store. The features of this application are designed for the new Apple Watch and will provide the Apple Watch user with reviews, ratings, and photographs of hotels, restaurants, and attractions. The Apple Watch feature called “Glances” allows users to get time-based updates from their favorite applications. Hence TripAdvisor Glance will provide timely recommendations for nearby attraction based on user’s locations and the time of the day. (Read Press Release).

Our valuation of $87 for TripAdvisor is at 4% premium to the current market price. Our 2015 revenue estimate for the company stands at $1.7 billion. Our GAAP and non-GAAP diluted EPS estimates stand at $2.70 and $3.20, respectively. These estimates are almost in line with the consensus estimates. TripAdvisor’s stock price saw 1.8% growth over the week through Monday.

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Notes:
  1. Apple Maps Now Offers Hotel Reviews From Booking.com and TripAdvisor, The Next Web, April 7, 2015 []
  2. TripAdvisor Acquires Restaurant Reservation App In Portugal, Skift, April 9, 2015 []
  3. TripAdvisor (TRIP) Q4 2014 Results – Earnings Call Transcript, Seeking Alpha, February 11, 2015 []