Tue, Nov. 24, 11:15 AM
- Priceline (PCLN -3.4%), Expedia (EXPE -3.5%), and TripAdvisor (TRIP -2.9%) are under pressure after the State Department (citing fears more attacks are planned) issued a global travel alert for Americans in the wake of the Paris attacks. The Nasdaq is down 0.8%.
- The alert doesn't call on Americans to avoid traveling, but does urge them to "exercise vigilance when in public places or using transportation."
- Of the three companies, Priceline has the most international exposure: 88% of its Q3 bookings came from non-U.S. markets, with a large chunk coming from Europe via the company's Booking.com unit.
- Expedia received 46% of its Q3 revenue from outside the U.S.. TripAdvisor got 47% of its Q3 revenue from outside North America.
Mon, Nov. 16, 9:57 AM
- A group of travel, lodging, and airline stocks are weaker than broad market averages on heightened concerns over global travel and tourism after the Paris attacks.
- Notable decliners include Delta Air Lines (DAL -1.8%), American Airlines Group (AAL -1.6%), Priceline (PCLN -4.5%), Expedia (EXPE -2.1%), China Lodging Group (HTHT -0.6%), Wyndham Worldwide (WYN -2.5%), Hilton Worldwide (HLT -2.6%), and Intercontinental Hotels Group (IHG -1.6%).
Mon, Nov. 9, 2:12 PM
- Down on Friday in response to TripAdvisor's Q3 miss and full-year guidance cut, Expedia (EXPE -2.5%) is underperforming today after archrival Priceline (PCLN -9.5%) provided below-consensus Q4 EPS guidance to go with a Q3 beat.
- Priceline's gross bookings rose 7% Y/Y in Q3 (22% exc. forex) to $14.8B, and are expected to rise 1%-8% in Q4 (13%-20% exc. forex). Expedia, which is less dependent on international sales (and thus hurt less by a strong dollar) than Priceline, saw bookings (exc. eLong) rise 21% Y/Y in Q3 to $15.4B. Excluding forex, growth was 26%.
- Separately, Piper's Mike Olson (Neutral rating, $130 target) thinks Expedia's forecast for the HomeAway (AWAY -1.7%) deal to boost EBITDA by $350M in 2018 is conservative, given HomeAway's recent introduction of a 6% traveler booking fee. He thinks the booking fee could add over $1B/year in revenue by 2018, and expects synergies between HomeAway and Expedia's platforms to significantly boost booking volume for vacation property owners.
Fri, Nov. 6, 1:32 PM
- Priceline (PCLN -1.6%) and Expedia (EXPE -2.9%) have sold off after TripAdvisor (TRIP -6.8%) posted a Q3 miss and cut its full-year revenue growth forecast. On its earnings call (transcript), TripAdvisor stated the rollout of Instant Booking (allows bookings to be made on TripAdvisor's site/apps, Priceline recently signed up) is affecting near-term revenue by pushing out revenue recognition relative to referral (click-based) payments.
- Also: Priceline says it's uninterested in making a rival bid for top vacation rental marketplace HomeAway (AWAY -6.2%), which recently agreed to a $3.9B sale to Expedia. HomeAway has fallen to $37.73, a price close to what Expedia's cash/stock offer is currently worth.
- TripAdvisor's management faced earnings call questions about the impact of Instant Booking on monetization and conversion rates. It insisted IB, and the the Priceline deal in particular, will be a major positive. "The reason Priceline enables us to accelerate our [Instant Booking] rollout globally is because of the rich content that they have on 400,000 plus properties all around the globe, and by that I mean they are able to successfully take bookings on 400,000 plus properties in multiple, multiple, different language, processing payments for multiple different credit card by multiple different banks."
- At the same time, management is taking a cautious approach to modeling international IB sales. "[W]hile we have the decent amount of experience now in U.S. and U.K., we don't quite know how [Instant Booking] is going to flowing in, in France, in Japan, all throughout age, all throughout all the other markets that we look to roll it out in."
- Oppenheimer's Jed Kelly has downgraded TripAdvisor to Perform, citing slightly weaker hotel trends and the "monetization drag" Instant Booking could have in the near-term. Nonetheless, he thinks the Priceline deal "should eventually enhance earnings long term, especially as revenue leakage and improving mobile monetization eventually equates to higher revenue per hotel shopper."
- Priceline and TripAdvisor rallied last week in response to Expedia's Q3 results and full-year guidance hike. Priceline reports on Monday morning.
Wed, Nov. 4, 5:33 PM
- Expedia (NASDAQ:EXPE) is now up strongly after hours in response to news it's buying HomeAway (NASDAQ:AWAY) for $3.9B. HomeAway has risen to $39.26 - at Expedia's current trading levels, the company's cash/stock payout for HomeAway is worth $39.06/share. (PR)
- Expedia CEO Dara Khosrowshahi: "We have long had our eyes on the fast growing ~$100 billion alternative accommodations space and have been building on our partnership with HomeAway, a global leader in vacation rentals, for two years ... we look forward to partnering with them to accelerate their shift from a classified marketplace to an online, transactional model to create even better experiences for HomeAway's global traveler audience and the owners and managers of its 1.2 million properties around the world."
- The deal is partly seen as an attempt to counter the rise of home/apartment rental marketplace Airbnb (Pending:AIRB), which was reportedly valued at an eye-popping $25.5B in a June round. Airbnb has long been seen a threat to HomeAway (though HomeAway has insisted it differs from Airbnb due to its focus on secondary home rentals), and Expedia admitted on its Q3 earnings call Airbnb could exert price pressure in some hotel markets by increasing available room inventory.
- Earlier: Expedia buying HomeAway for $3.9B
Wed, Nov. 4, 4:21 PM
- Expedia (NASDAQ:EXPE) is buying leading vacation rental marketplace HomeAway (NASDAQ:AWAY) for $3.9B in cash and stock, or $38.31/share based on Expedia's Tuesday close.
- Expedia will pay $10.15/share in cash and issue 0.2065 shares for each HomeAway share. The deal is expected to close in Q1 2016.
- AWAY is halted. EXPE is up fractionally after hours.
Fri, Oct. 30, 1:57 PM
- TripAdvisor (TRIP +4.6%) has joined Priceline (previously covered) in getting a lift after Expedia (EXPE +9.3%) reported a 21% Y/Y increase in gross bookings to $15.4B, aided by a 36% increase in hotel room nights and a 31% increase in air tickets sold.
- Also: On its earnings call (transcript), Expedia hiked its full-year adjusted EBITDA growth forecast (exc. eLong) to 12%-15% from 10%-15%. Excluding recently-acquired Orbitz, growth is expected to be at the high end of the range. Including Orbitz, it's expected to be at the low end.
- CEO Dara Khosrowshahi estimates Orbitz would have delivered 2015 adjusted EBITDA of $135M on a standalone basis, below Street expectations. However, he added Expedia now thinks there's "meaningful upside" to a prior target for $75M/year in acquisition-related synergies.
- Khosrowshahi also insisted Expedia still has a long growth runway - "Keep in mind that we're still just a single-digit percentage of total room nights in the U.S." - and downplayed fears of competition from fast-growing Aribnb (Pending:AIRB), albeit while admitting Airbnb could "put pricing pressure in certain markets where you see a significant amount of Airbnb inventory." CFO Mark Okerstrom forecast hotel margin pressure will continue through 2016, but ease towards the end of the year.
- Benchmark, RBC, and Cantor have hiked their Expedia targets. Shares have made fresh highs. TripAdvisor, stung on Tuesday by a Macquarie downgrade, reports on Nov. 5.
Thu, Oct. 29, 6:01 PM
- Expedia (NASDAQ:EXPE) has jumped to $135.70 after hours, making new highs after beating Q3 EPS estimates (while slightly missing on revenue) and reporting a 21% Y/Y increase in gross bookings (exc. eLong) to $15.4B, a slight improvement from Q2's 20% growth. Rival Priceline (NASDAQ:PCLN), which reports on Nov. 9, is up 1.1% to $1,441.00.
- Q3 geographic performance: U.S. revenue rose 18% Y/Y to $1.05B, and international revenue 15% (33% exc. forex) to $890M. U.S. bookings rose 22% to $9.6B, and international bookings 19% (37% exc. forex) to $5.8B.
- Metrics: Hotel room nights +36% Y/Y to 61.5M (25% U.S. growth, 50% international); revenue/night -15%. Air tickets sold +31%; revenue/ticket -9%. The core travel agency business (OTA) saw revenue rise 18% to $1.74B; trivago (metasearch) revenue rose 27% to $176M, and Egencia (managed travel services) fell 3% to $94M.
- Sales/marketing spend (much of it going to Google) remained heavy, rising 20% Y/Y on an adjusted basis to $929.8M. Expedia ended Q3 with $1.5B in cash, and $2.5B in long-term debt.
- Q3 results, PR
Mon, Oct. 26, 1:27 PM
- Priceline (NASDAQ:PCLN) is up strongly following news Chinese online travel leader Ctrip (CTRP +21.1%), in which Priceline has an 11.6% stake, announced it's acquiring Baidu's stake in top rival Qunar (QUNR +15.9%) in exchange for shares.
- Expedia (NASDAQ:EXPE), which formed an alliance with Ctrip earlier this year as part of a deal to unload its 62.4% stake in struggling Ctrip/Qunar rival eLong, is also doing well.
- The deal leaves Ctrip owning 45% of Qunar's voting interests, and Baidu owning 25% of Ctrip's voting interests. It brings together China's two biggest online travel firms, and could lead each company to pare back the aggressive promotions and heavy marketing spend it has supported in the name of taking share from the other.
- HSBC's Chi Tsang: "Essentially it’s a merger between the two companies. If you look at the travel market, it’s such an obvious way to drive synergy through consolidation.” As part of the deal, Ctrip has won seats on Qunar's board, and Baidu seats on Ctrip's board.
- At current levels, Priceline's 17.5M-share stake in Ctrip is worth $1.58B. Expedia reports on Thursday afternoon, and Priceline on the morning of Nov. 9.
Wed, Oct. 14, 9:42 AM
- Certain Priceline (PCLN +0.2%) travel brands will support TripAdvisor's (NASDAQ:TRIP) Instant Booking solution, which allows users to make bookings without leaving TripAdvisor's site/apps.
- Development work has already begun to integrate Priceline hotel properties with Instant Booking, which will be supported by Priceline's Booking.com unit (dominant in Europe). The Priceline.com and Agoda.com brands are "likely" to support Instant Booking in time.
- Expedia (NASDAQ:EXPE) has sold off on the news. Morgan Stanley views the deal as a negative for Expedia, noting it gets 9% of its business via TripAdvisor.
- 235K properties are currently available via Instant Booking; a deal with Marriott was struck in June. Priceline (along with Expedia) had previously boycotted Instant Booking even as it supported similar features on other apps, a move seen as highlighting the tension that existed between the platforms.
- Update (12:23PM ET): Regarding Priceline's prior stance towards Instant Booking, a Priceline VP tells Seeking Alpha the company had never said it would "never" support Instant Booking, unlike Expedia. Meanwhile, RBC's Mark Mahaney calls the deal a "big win for TRIP, a small positive for PCLN and a slight negative for EXPE."
Wed, Sep. 16, 3:59 PM
- Bloomberg reports U.S. regulators are set to approve Expedia's (EXPE +5.1%) $1.6B purchase of smaller rival Orbitz (OWW +6.4%). Shares of both companies have shot higher in response.
- The DOJ has been closely vetting the deal, which has sparked complaints among travel industry firms about the post-merger company's dominant U.S. online travel share and potential pricing/bargaining power.
- Update (4:26PM ET): The DOJ has released a statement confirming it won't challenge the Expedia/Orbitz deal. "The Antitrust Division investigated the concerns that have been expressed about this transaction. We took those concerns seriously and factored into our analysis all of the information provided by third parties. At the end of this process, however, we concluded that the acquisition is unlikely to harm competition and consumers."
Fri, Jul. 31, 1:25 PM
- Expedia (NASDAQ:EXPE) has surged to fresh highs after beating Q2 EPS estimates (and posting in-line revenue) on the back of a 20% Y/Y increase in gross bookings to $15.1B. Bookings growth was slightly better than Q1's 19%, and better than feared given forex headwinds - a strong dollar respectively had 8% and 10% impacts on bookings and revenue growth.
- On the earnings call (transcript), CFO Mark Okerstrom reiterated full-year guidance for 10%-15% adjusted EBITDA growth (exc. the recently-divested eLong). "Though Q2 came in a bit better than expected, we plan to put that upside back into the business mostly in Q3 to drive continued growth."
- CEO Dara Khosrowshahi noted the core Expedia and Hotels.com platforms continued seeing strong growth, as did Travelocity. He also suggested Expedia could follow up its acquisitions of Travelocity and (pending DOJ approval) Orbitz by acquiring assets in overseas markets, where Priceline (NASDAQ:PCLN) and its Booking.com platform loom large. "[F]or the time being, we've got plenty on our plates ... We want our revenue outside the U.S. to be bigger than our revenue in the U.S."
- U.S. bookings rose 18% Y/Y in Q2 to $9.3B, and international bookings (pressured by forex) 25% to $5.8B. Hotel room nights rose 35% (28% organic) to 50.6M, while revenue/night fell 16%. Air tickets sold rose 26% (20% organic), and revenue/ticket fell 10%. Sales/marketing spend rose 19% Y/Y to $885.5M, but tech/content and cost of revenue growth was more moderate.
- Priceline is following Expedia higher ahead of its Aug. 5 Q2 report.
- Expedia's Q2 results, PR
Fri, Jul. 31, 9:19 AM
Thu, Jul. 30, 4:16 PM
Tue, Jun. 30, 11:47 AM
- Piper's Michael Olson reports checks for online travel trends through May point to a strong Q2 for the industry.
- Priceline (PCLN +2.8%), Expedia (EXPE +2%), Travelzoo (TZOO +3%), HomeAway (AWAY +1.6%), and TripAdvisor (TRIP +0.9%) are outperforming to varying degrees amid a 0.5% gain for the Nasdaq. Aside from Expedia, the group has been pressured by a mixture of forex and company-specific concerns. Piper has a neutral rating on Expedia due to valuation concerns, and Overweight ratings on Priceline, TripAdvisor, and HomeAway.
- Separately, Expedia has named worldwide engineering SVP Aman Bhutani the president of the Brand Expedia Group, which covers Expedia.com, Travelocity, Wotif, and Expedia's JV with AirAsia - CEO Dara Khosrowshahi has been handling the job for over 3 years. GeekWire notes Bhutani has a strong reputation within the company for making data-driven tech decisions and experimenting with product changes.
- Previously: Deutsche downgrades Priceline, cites Airbnb
- Previously: Macquarie: HomeAway is cheap if Airbnb is worth $24B
Wed, Jun. 10, 2:57 PM
- Cowen's Kevin Kopelman, hiking his Expedia (NASDAQ:EXPE) target by $12 to $130 and reiterating an Outperform: "ELong was on track to lose $100 million (this year), dragging down Expedia earnings per share by about 20% ... The sale of eLong removes a major overhang and allows Expedia's core ... earnings to be more fully appreciated in consolidated metrics, although Trivago (another travel site owned by Expedia) continues to be underappreciated due to a lack of earnings."
- Kopelman adds he left meetings with CFO Mark Okerstrom with more confidence in Expedia's growth trajectory. He highlights Expedia's 27% Y/Y Q1 organic hotel room night growth, and expects hotel take rates (-10% Y/Y in Q1) to stabilize. "We believe Expedia is well positioned to continue gaining market share of the hotel booking industry, given its strong portfolio of global brands and competitive technology platform and hotel network."
- In April, Kopelman hiked his Expedia target by $25 to $115, while arguing the company's P/E (then at 27) was misleading on account of the eLong impact and other factors. Shares currently go for 21.6x a 2016 EPS consensus of $5.01.
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