How Is Priceline’s Hotels Division Expected To Trend?
Priceline’s hotels division contributes around 90% of its revenues and around 85% of our stock price valuation for the company. Priceline’s booking.com is the current leader globally in online accommodation booking. In line with previous quarters, booking.com again delivered a solid quarter in Q2 with the list of accommodations on its platform crossing 1 million, reflecting a 30% year-on-year growth. The brand has almost doubled the number of properties on its platform in around two years time. Booking.com is presently looking into more aggressive penetration into the single-owner, single-room market. Some of the reasons for booking.com’s widespread popularity are its wide range of accommodation offerings, not charging a booking fee (most online travel agencies charge a 5% to 15% booking fee), and instantly confirming reservations as opposed to a 24 hour confirmation time taken by other websites. The website crossed 100 million customer accounts in 2015 and witnessed its one billionth guest stay. We expect the growth story of Priceline’s hotel segment to continue in the future with a CAGR of ~6% over the next 7 years.
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