Online travel sees a beat and a miss: Priceline and TripAdvisor
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Online travel sees a beat and a miss: Priceline and TripAdvisor

TripAdviser and Priceline – both companies at the heart of the online travel trend – reported earnings for the first quarter recently, demonstrating a mixed bag of hits and misses. However, the underlying story that the companies share remains largely unchanged. TripAdvisor saw a slight miss on earnings, posting $0.24 per share – that’s $0.02 per share less than analysts had hoped for. Priceline, meanwhile, managed to beat consensus estimates, delivering earnings of $9.88 per share – a full $1.04 higher than expected.

Priceline and TripAdvisor share prices make gains over 30 days

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SOURCE: Yahoo Finance

Looking more closely at TripAdvisor’s results show that they were fairly consistent with the group’s previous quarters. Non-hotel segments saw an 18% growth in sales from the year-ago quarter, and click-based and transaction revenue in the hotel space rose by 12% over the same period. The company also continued its trend towards a stronger domestic presence at the expense of an international one: over the first three months of the year, TripAdvisor saw a 5% jump in North America’s share of revenue (it now contributes 57% of the company’s business) against a 3% drop in Europe, and 2% in the rest of the world.

Priceline, meanwhile, failed to match expectations on revenue (analysts had expected $2.45 billion, but the company returned $2.42 billion), but it nonetheless rose significantly from the same period a year ago (+12.6%).

Both companies expressed satisfaction with the results. Priceline’s Glenn D. Fogel said:

“Turning to priceline.com overall, we are pleased to see the team make progress in Q1 as priceline.com began to see benefits from their investments in technology and people. These investments have resulted in improvement to product, user interface, and experiment velocity, and shows that priceline.com is relentlessly focused on delivering the very best deals to its customers. We believe that these efforts along with priceline.com's new best deal brand campaign which highlights its consumer value proposition will drive further improvements.”

Meanwhile, TripAdvisor’s Steve Kaufer said “2017 is off to a productive start.” And that the company was “building on our strength as we further streamline the hotel shopping experience.”

Disclosure

Dominion holds both TripAdvisor and Priceline in its Global Trends Ecommerce Fund.


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