Boosted By Its Booking.com And Other Segments, Priceline’s Growth Momentum Is Expected To Continue In Q2

by Trefis Team
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After delivering a robust 2016, Priceline continued with its impressive performance in the first quarter of 2017 as well. In fact, during its Q1 earnings call, its management indicated that the company was eating into the market shares of its competitors. Priceline’s results revealed that the company is growing at a much faster pace than its closest rival, Expedia. It is noteworthy to mention that unlike growth with the help of acquisitions as pursued by some of its close rivals (most notably, Expedia), Priceline’s growth has been mostly organic, hence, proving how all its segments are churning out growth and helping the company to maintain its leadership amidst stiff competition. Though it did not undertake any big acquisition last year, in February this year, Priceline completed a deal to take over the Momondo Group in order to aid its metasearch engine Kayak with its expansion in markets where it has so far lagged behind. Priceline’s steady focus on the accommodation booking segment seems to be working, with Booking.com being the most popular accommodation booking platform in the world. Booking.com’s zero transaction fee model, along with its instant booking option, makes it a big hit among travelers.

All Of Its Segments Are Growing Steadily, And The Trend Is Expected To Continue

In the first quarter, each of Priceline’s segments grew steadily. Booking.com, as usual, stole the show with accommodation properties on its platform reaching ~1.2 million, reflecting a 36% y-o-y growth. Its metasearch engine, Kayak, delivered strong profit margins and continued to invest in improvements on its platform, on the enhancement of mobile applications, and on developing new products. Priceline’s rental car days grew by 15% in the first quarter, making it the third consecutive quarter of accelerating growth. The company’s online restaurant booking platform Open Table 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. Priceline’s 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. We expect the growth momentum of its various segments to continue into the second quarter as well, while Priceline keeps grabbing more market share from its competitors in the OTA space.

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Notes:

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