With gross bookings and hotel room nights up more than 50% each in the fourth quarter, Priceline says its Booking.com, Agoda and Priceline.com brands all gained hotel market share.
In contrast, Expedia Inc.'s hotel room nights jumped just 19% in the fourth quarter, and Orbitz Worldwide's global hotel room nights in the fourth quarter fell 2% year over year.
“The Priceline Group experienced a strong 4th quarter for our travel reservation services.” said Jeffery Boyd, CEO of the Priceline Group. “Globally, the group grew room night reservations by 53% as compared to 47% in the 3rd quarter. We believe that each of our brands, Booking.com, Agoda and priceline.com, gained share in the retail hotel room reservations market, while our Name Your Own Price hotel business in the United States continued to be impacted by increased competition in the discount market.”
Also, in the quarter, Priceline consolidated its car rental brands, including Traveljigsaw and RentalCars.com, and rebranded them globally as RentalCars.com. Car rental bookings increased 34% year over year in the fourth quarter.
For the company as a whole, revenue growth outside the US was especially strong. Total revenue, including that for the US and abroad, grew 35.5% to $991 million, and within that, international revenue leap-frogged 62.7% to $610 million.
And, profits in the quarter were up 66.3% to nearly $226 million.
The top line results were propelled by growth in hotel room nights and increases in average daily rates, 6% in the US and 2% abroad.
Booking.com saw especially strong growth in Asia, South America and the US, all of which grew at a faster clip than its core European market, Boyd said.
However, he noted that Booking.com has plenty of room to grow in Europe, as well.
And, Agoda recorded strong growth in Asia despite the impact of flooding in one of its key markets, Thailand, he added.
Dan Finnegan, the Priceline CFO, noted that the company is not facing the pressure of "margin compression" as are some online travel agency competitors, which are busy re-platforming.
Orbitz just finish its multiyear project to migrate all its brands to a new technology platform and Expedia still has a way to go with its technology transition.
Boyd explained that Priceline's capital expenditures are increasing, but not because of a major IT project. Instead, he said, capital expenditures are rising at a moderate pace to support increased traffic loads as well as office and personnel expansion for Booking.com in Amsterdam and the UK, for example.
In response to a question from an analyst during Priceline's fourth quarter earnings call, Finnegan said Priceline doesn't see getting into corporate travel as an attractive opportunity. He cited Expedia's Egencia business, characterizing it as "high touch" and "not a very profitable business."
Despite the reluctance to target the managed corporate traveler, Boyd does see the prospect that RentalCars.com could develop into a "strong international brand," although car rentals don't have the upside that hotels do.
He added that there are some cross-sell opportunities between Priceline's car rental and hotels businesses, but RentalCars.com "will have to be successful independently."