The Priceline Group Inc. reported its second-quarter net income of $720.2 million, up from $580.6 million year over year.
Gross travel bookings were $20.8 billion, an increase of 16% over a year ago.
Gross profit increased 21%, to $3 billion.
Priceline beat both its expected earnings per share and revenue, but after-hours traders punished the group due to its lower guidance on room nights booked and gross travel bookings; the stock price was down 6.5%.
Booking.com, the group’s Amsterdam-based accommodations powerhouse, now has more than 1.3 million hotels in 220 countries and territories in its inventory.
Chief executive officer Glenn Fogel said adding inventory – especially non-hotel properties -- is key to Priceline’s success, offering more choices to consumer:
“We offer both types on the results page. We don’t drive the customer to one or the other; the customer makes that choice.”
Agoda, Priceline’s Asian accommodations site, is using technology, including machine learning, to compete in a very tough market, Fogel said.
Asia – and especially China – presents a great opportunity because there are so many first-time travelers among the rising middle classes.
“But when you have strong opportunity, it becomes a land grab,” Fogel said.
New companies come in and try to build up their brand awareness by raising capital and giving it away to customers through discounting, he said. “That makes things more difficult for public companies.”