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Priceline

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by

Charles Samson

on 11 March 2014

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Transcript of Priceline

Founded in 1997 by Jay S. Walker, Connecticut-based Priceline (www.priceline.com) is an American company which provides its services through a commercial website

Claims to help users to find discounted rates for travel-related purchases such as:
airline tickets
hotels
rental cars
cruises
vacation packages

Not a direct supplier of these services


Charles Samson
Dunja Gschliesser
Ermin Rejzovic
Jayna Labrie
Jin Vieth

Digital Media and E-Marketing

What is priceline.com?
Priceline worldwide
History of
Priceline
Experiments
How to use
Priceline.com
First known for its "Name Your Own Price - NYOP" system

Advantage of system:
Travelers can name their own preferred price, general location and service level

Drawback of system:
Travelers see the vacation package only after purchasing it

Customers proclaimed Priceline as a scam
From NYOP to a traditional system
Priceline changed its Business Model

Travelers are now presented prices and also told the name of the establishment

Travelers still have the option to name their desired price

New products:
cruises
tours
attractions
1st experiment, 2000
selling gasoline and groceries under the NYOP system

2nd experiment, 2000
online auction business with Priceline Yard Sales

3rd experiment, 2000
long distance telephone service and automobiles under NYOP system

Termination of all models in 2002
1. Presentation of the company
2. Company datas
3. SWOT analysis
4. Priceline in different countries
5. Improvements
Overview
Type in the desired destination

Choose the dates

Select the number of rooms
Improvements
Company Data
The "Name-Your-Own-Price" system
Originally brought on the Internet by Priceline.com

Special business model similar to reverse auction


Buyer
specifies a
price $
,
sellers
match that combination
Financial Data
Over 295,000 hotels worldwide

Priceline.com, Inc. on the NASDAQ(Symbol: PCLN)

Is now the #57 largest company according to the S&P 500 index

Customer support provided in 41 languages

Car rentals available in 6,000 locations throughout the world.
Overview
Acquisitions
Priceline, Booking.com, Active Hotels and Agoda are separately branded for dissimilar demographics.
All regulated and integrated into the Priceline business model
Stock price :
1,369
$
Shares :
52.14M
Mkt cap :
71.35B
P/E :
38.00
EPS:
36.11
Analysis
Revenue from $5.3B to $6.8B

reduce the cost of goods sold from 21.98% to 15.65%

+0.5B in net income
Forecast
Forecast Earnings Growth
average annual rate of 19.25%
A GLOBAL PRESENCE
Through acquisitions in recent years, the company has grown rapidly its international presence in more than 180 countries.

Only 32% of its revenues come from the United States.

The Group's strategic orientation towards Europe and Asia allows Priceline to outperform relative to its competitors, the main one being Expedia.

Growth in bookings and income were more than 40% and 20% respectively over the past five years (vs. 10% in the Expedia), and net margin of over 27% in 2012 (vs. Expedia 10%).

Expedia the principal concurrent
Wall Street loves Priceline, which broke through the $1,000 per share.(1047)
Shares of its closest rival, Expedia Inc., meanwhile, were selling for roughly $1,000 less, at $52.
Why is there such a huge gap?

Priceline vs expedia
Faster Growing

Consistent Execution

Hocus Focus

Still on a snapshot basis, the two hotel booking giants are in the same ballpark. Priceline’s third-quarter revenue was $1.45 billion vs $1.14 billion for Expedia. Net income was $469.5 million for Priceline vs. $209.5 million for Expedia.

Surprised to learn that Priceline is the first online travel agency.
Priceline is used in France through Booking.com.
Expedia Tripadvisor most used.

Priceline in France
Charles Samson
As a whole, I think that Priceline is a great traveling website and really innovative. But with further investigation and comparison, I'm not convinced that Priceline can offer substantially lower prices than other websites.
Dunja Gschliesser
In Switzerland, Priceline is one of the most often used websites, through its acquisition of Booking.com, when it comes to travel-related services. That is why I think that Priceline has already achieved an adequate market share to stay one of the top leading travel booking websites.
Ermin Rejzovic
To conclude, if Priceline continues with this business model they will eventually control a huge part of the whole online travel market. Nevertheless, Priceline still has to position itself with a proper strategy to stay on top and avoid a eventual crisis in the next 5 years.
Jayna Labrie
In America, I think that Priceline is very popular and a leading booking site. There are a few sites that offer the same types of services, and Priceline would have to build up their product in a different way in order to excel beyond the others. I think it is reliable and practical.
Jin Vieth
Priceline had made dramatic improvement to its fundamental by acquiring various international booking sites. On top of that, the acquisition of kayak.com will put Priceline in great position for future growth.
Conclusion
Our personal thoughts
Membership Program
Small Fee
Premium Bidding
Ensures Returning Customers
Links
To hotels, airlines, car rental, and cruise websites.
To see specifics
For easier contact
Branch Out Services
One stop shop on Priceline website
Other forms of travel
Excursion suggestions
Campaign
Use of social media platform
Trip planning/travel advice
SWOT analysis
Strengths
High revenue & earning growth

Large market share

Strong international presence

High brand awareness
Weaknesses
Mainly focused on leisure travel

Very vulnerable to economy condition

Exposed to fluctuations in currency exchange rates

Risk of security breaches to personal data
Opportunities
Room to grow in Asia and South America

Advertising Revenues from Kayak

Develop a branch aimed for non-leisure travelers

Threats
Competition from other online travel sites
Online Portal Sites
Meta-search sites
Oil price
Terrorist attacks
Weather
Natural disasters
Travel related health concerns
Political instability
Regional hostilities
Full transcript