Priceline.com (PCLN) has been expanding worldwide and the strategy is paying off. First quarter gross travel bookings, which measures the total dollar value including taxes and fees of all travel services purchased by Priceline.com consumers, came to $4.7 billion, an increase of 57.3 percent from the first quarter of 2010.
Total revenues in the first quarter of 2011 hit $809.3 million, a 38.5 percent increase over a year ago. Net income rose 93 percent to $104 million. Bookings, revenue, and income figures beat many analysts' expectations.
The company attributes the spikes in revenue and profits largely to increased hotel bookings. More and more people are booking hotels online, and more hotels were available on Priceline.com across the world.
"In the first quarter, the group benefitted from strong growth in our global hotel business, particularly at Booking.com and Agoda," Priceline CEO Jeffery H. Boyd says in a statement. "Room nights booked grew by 55.8 percent and our international gross bookings grew by 79 percent compared to prior year first quarter."
Analysts like Priceline.com because of its size and reach, which makes it easier to match travelers with new hotels in emerging markets such as in South America and Asia, on top of the United States and Europe.
Weathering the storm
Plus, the company even did better in the downturn than its competitors.
"Because of its good positioning, the company's growth rate decelerated slightly during the recent recession while some of its peers were experiencing revenue declines," Standard and Poor's analysts write.
Susquehanna Financial Group recently initiated coverage of Priceline.com with a positive recommendation. Citigroup is bullish on the company as well, recently reiterating a buy rating on Priceline.com.
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