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PCLN Still Outperforms its Rivals; Continues to Grow Despite Global Economic Woes

May 11, 2009

Analysis of:Priceline 1Q Earnings Jump 81%, Sees 2Q Results Above Views | online.wsj.com

Online travel has been hurt by Global recession woes, the Swine Flu outbreak and significant drop in overall travel bookings. PCLN has been bucking the trend, and increasing market share from its competitors because of its opaque model, and appeal to hotel suppliers. PCLN's business process and technology allows hotel revenue management to determine how little they are willing to earn to fill their inventory. Priceline projected second-quarter earnings of $1.65 to $1.75 a share on an 8% to 13% increase in revenue. PCLN posted earnings of $25 million, or 53 cents a share, up from $13.8 million, or 28 cents a share, a year earlier.

OWW and Travelocity: New hotel offerings to challenge PCLN position?

May 5, 2009

Analysis of:Orbitz Tees Up Hotel Deal | online.wsj.com

Two major moves by OTAs Orbitz and Travelocity today could affect PCLN's position as a differentiated hotel distribution agent. OWW launched "Price Assurance" for hotels - similar to the airline ticket initiative last June, which automatically reimburses customers for tickets if someone else buys the exact same ticket at a lower price. In this case, it lowers the price to match the lowest purchased hotel rate. Quietly, too, Travelocity unveiled its opaque model - similar to those of PCLN and Hotwire - and according to VP Hotels, Noreen Henry, the site will offer thousands of hotels via this model by mid-summer.

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