Europe not just great for holidays
Europe is great for the hotel business for a number of reasons, its a big holiday destination and Europeans tend to take more holidays on average 6.9 weeks a year versus the US at 3.9 weeks. The most attractive feature of Europe for PCLN is the large number of independent hotels. Independent hotels have the majority of marketshare (around 70%) this compares to the US where chain hotels like Hilton and the Marriott have the majority of market share. This makes booking.com more important to the boutique hotels as they are much more reliant on booking.com to generate traffic from overseas customers. Many of these hotels do not have the resources to market online and to distribute in foreign countries and languages. Booking.com also has some great ideas for hotel bookings (see below.)
http://www.thebookingtruth.com/reviews/bookings-best-resorts/four-seasons-hotel-limasson-cyprus-2/
Booking.com has 525,000 properties worldwide including 190,000 vacation rentals. The number of properties still has room to grow as Trip Advisor has reviews on 850,000+ hotels, B&B's and 630,000+ vacation rentals. The PCLN group will also benefit from increasing internet adoption in Latin America and the Asia Pacific. PCLN owns 10% of CTRIP China's leading online travel agency.
Google's largest customer
PCLN spent $1.8 billion in online advertising last year. Analysts have estimated that the majority of this spend went to Google. PCLN is one of their largest customers at around 3% of the search company's ad revenue. PCLN also recently announced the acquisition of Opentable increasing the group's opportunity to grow from hotels to restaurant reservations as well. With online travel bookings continuing to increase at Decisive we're checked in with PCLN.
Jason
Disclosure: Decisive has a position in Priceline (PCLN) stock
The material in this article is for informational purposes only and in no way constitutes a solicitation of business or investment advice. The material has been prepared without regard to any client's or other person's investment objectives. Before making an investment decision you should consider the assistance of a financial adviser and whether any investment or service is appropriate in light of your particular investment needs.
