Priceline Seems To Be Capturing Market Share From Competitors

by Trefis Team
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Priceline’s first quarter results revealed that the company is growing at a much faster pace than its closest rival, Expedia. During the earnings call, its management indicated that the company was eating into the market shares of its competitors. To put it into perspective, in Q1 2017, while Priceline’s room nights grew by 27.4% to 173.9 million, Expedia’s room nights grew by around 12% to 64 million. However, it should noted that hotel bookings are Priceline’s biggest focus, with over 90% of its revenues coming from this segment last year, whereas Expedia’s hotel bookings contributed to around 65% of its revenues during the same period. Still, Priceline’s steady focus on the accommodation booking segment seems to be working for it, with being the most popular accommodation booking platform in the world.’s zero transaction fee model, along with its instant booking option, makes it a big hit among travelers. Along with this, Priceline’s focus on organic growth and fewer acquisitions seem to be putting it in a good position. Overall, in Q1 2017, Priceline’s total gross bookings grew by 24% y-o-y to reach close to $21 billion. Its revenues grew by 12.6% to $2.4 billion, while its net income rose by 22% to $456 million. Needs To Up Its Vacation Rental Game

Currently, accommodation properties on amount to 1.2 million, reflecting 36% y-o-y growth. The company’s aim to grow its non-hotel accommodation properties is evident by the fact that vacation rental properties on the platform grew by 51% in the quarter and stood at 640,000 properties.

The advantage that Priceline has is that its vacation rental properties are instantly bookable and don’t have a booking fee, unlike Expedia’s HomeAway which charges fees and is still trying to make properties instantly bookable. Also, the rate at which is growing its vacation rental properties is much faster than the others. Expedia’s HomeAway experienced a 16.6% growth during the same period while Airbnb experienced 20% growth. Even then, will have to invest in TV and other online campaigns to carve out a sizable chunk in the vacation rental market, where Airbnb and HomeAway remain more popular names.

Strategic Investments In Other Segments Seem To Be Working Well
  • Priceline’s rental car days grew by 15% in the first quarter, making it the third consecutive quarter of accelerating growth.
  • Priceline’s metasearch engine, Kayak, delivered strong profit margins and continued to invest in improvements on its platform, mobile enhancement, and developing new products. Priceline has recently announced its decision to acquire Momondo Group to complement Kayak’s global footprints, and the deal is expected to close by the end of 2017.
  • Agoda is doing well in the Asia Pacific region with its discounted offerings, which are more popular in the region. Agoda is investing in its supply platform and closed user groups to bring in more deals at attractive rates to its customers.
  • The company’s online restaurant booking platform Open Table has exceeded expectations in terms of both the top and bottom line. OpenTable has advanced with its initiative of upgrading restaurants from its electronic reservation booking system to the cloud-based guest center service. It has also undertaken other innovations including launching a chat feature on Facebook messenger.

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1) The purpose of these analyses is to help readers focus on a few important things. We hope such communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Priceline

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