Priceline Surges On European Travel Despite Greece

With all its fiscal problems, Europe may not seem the best place to do business. But it’s been a great place for leisure-travel Web operator Priceline (PCLN) .

Year-over-year traffic at Priceline’s prized Europe-based hotel site Booking.com has been growing close to 30% the last couple of quarters.

Austerity measures or not, the European leisure travel market remains the largest in the world in terms of money spent on travel, says Raymond James analyst Aaron Kessler, citing research from PhoCusWright.

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And Priceline, through its Booking.com site, is the leader and fastest-growing company in the European online hotel booking market.

Since online penetration in Europe is still only about 25% for hotels, “there is still a lot of market share to be gained over the next few years,” Kessler said.

Priceline has morphed into an international company. Growth in the U.S. from Priceline.com’s famous “Name Your Own Price” product has slowed while Booking.com and Asian website Agoda.com have grown rapidly.

U.S. Growth

“The U.S. is doing okay, but it’s not driving the growth,” Kessler said.

It grew 13% in 2011 and will grow about 10% this year, he figures.

In the third quarter, the last reported by Priceline, international bookings grew 61% over the prior year after growing 79% in the second quarter.

About 80% of the company’s profits come from international markets, and more than 50% from selling hotel rooms to European travelers, says analyst Mark Mahaney of Citigroup.

“If any Internet consumer company has material exposure to Europe, it is Priceline,” he said.

“(Priceline’s) stock is very sensitive to the market’s perceptions of Europe,” he said. “If we had talked two months ago, we would have talked about how much correction Priceline’s stock went through.”

As anxiety over Europe eased in recent weeks, Priceline’s stock broke out.

On Feb. 13, shares jumped nearly 5% to 571 on news of a Greek austerity deal. On Feb. 21, the stock reached a 10-year high of 593.

“People are a little more positive that Europe is stabilizing,” Kessler said.

Europe is still a fluid situation.

After reporting a blowout third quarter in early November, Priceline tamped down expectations for the fourth quarter, typically a light period in the travel industry anyway. Some of the reasons included foreign-exchange head winds and economic uncertainty, including concerns over Greece’s potential default.

The Norwalk, Conn.-based company expects quarterly revenue to rise 27% to 32% to $928.7 million to $965.3 million. It guided per-share profit of $4.90 to $5. Both were lower than Wall Street views at the time.


Greece passes writedown law, continues work on cutbacks

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Single supplements: how to avoid them

I have two issues with this. The first concerns the pricing of single rooms,
which are often inferior to doubles and may be tucked away in less
attractive parts of the hotel. Despite these disadvantages, the rates are
usually far more than half the price of a double.

Second, if a hotel or ship isn’t full, the claims that revenue is lost when a
room is sold to a single person seem much less convincing. In this
situation, single travellers could argue that they are occupying a room
which would otherwise be empty and not producing any revenue. And since
single travellers are much less likely to be tied to travelling in school
holidays, they will often be staying at quieter times when some rooms are
likely to be empty. Just as airlines can now predict seat sales, hoteliers
are very good at predicting the periods when they will have spare capacity.
Knowing this, they could make more of an effort to attract singles.

To be fair, some do make an effort and work with operators to reduce extra
charges or offer supplement-free holidays. I’ve listed some examples from a
range of operators on the right. But first, here are six ways to avoid or
reduce supplements in a more strategic way.

Six ways to avoid a single supplement

1. Negotiate
Holidaymakers have the upper hand over tour operators and hotels at the
moment. If you are booking at a time when the hotel is unlikely to be sold
out or is offering special deals, phone and ask the tour operator whether it
will waive the supplement.

2. Cut out the middle man
If you are prepared to book independently, try contacting the hotel by phone
or email to negotiate the best possible rate for a single room or single
occupancy.

3. Travel in the shoulder season
In the Mediterranean that means May and June and September and October. Many
hotels are quieter at these times and more willing to offer better rates for
single occupancy. Some tour operators and cruise companies highlight dates
in these months when they are offering tours and hotel stays which are
reserved for single travellers or which don’t attract supplements.

4. Book with an operator that specialises in singles holidays
Below are six companies that offer various types of holiday specificially
aimed at single travellers. Some offer tours with a balanced number of men
and women; some are relaxed about such things. Mostly, they do not charge
supplements, but offer a single or double room for sole occupancy – though
that does not mean they are necessarily cheaper overall than an operator
which prices in a different way, so compare prices before booking).

Friendship Travel (0871 200 2035; friendshiptravel.com);
Just You (0800 112 3311; justyou.co.uk);
Small Families (0845 900 0895; smallfamilies.co.uk)
which is aimed at single-parent families; Solitair Holidays (0845 123 5515; singlesholidays.com);
Travel One (0844 576 6866; travelone.co.uk);
Solos Holidays (0844 815 0001; solosholidays.co.uk).

5. Consider sharing
Many tour operators will offer to try to arrange a shared room with another
single traveller of the same sex. Alternatively, you could try to find a
travelling companion through a specialist singles website. Two membership
sites which put a particular emphasis on travel are singleagain.co.uk
and companions2travel.co.uk
(both charge £25 a year for membership, but have cheaper, trial periods).

6. Consider adventure travel
Trips where most nights are spent camping or in refuges, youth hostels or
simple lodges, and food is paid per person out of a kitty, are far less
likely to charge significantly more for single bookings.

Holidays with no supplement – or a very low one

Here are some suggestions for holidays from mainstream tour operators which
are charging low single supplements or none at all. Because of space
restrictions I haven’t put full details of the holidays quoted – just the
price followed by the supplement, if any, which single travellers must add.
All, except those in Britain, include return flight. Please check the
website of each operator for full details.

Andante Travels (andantetravels.co.uk),
the archaeological tours specialist, has a handful of tours with single
supplements of £120 or less, including Troy and its Aftermath (£1,450; £100)
and A Cultural Carousel in Sicily (£1,900; £120).

Exodus (exodus.co.uk), the
adventure operator, says almost half of its clients are singles. It has a
range of tours aimed at solo travellers to destinations including Peru (the
Inca Trail), the Atlas Mountains and Kilimanjaro. No single supplement is
charged because you are twinned with a fellow traveller of the same sex.
Look for the “Solo Departures” symbol on the website.

Great Rail Journeys (greatrail.com)
has two escorted holidays by rail specifically for solo travellers, with
no single supplements. Jungfrau Express Golden Pass, an eight-day tour
to Switzerland, costs from £1,735; and the Beautiful Black Forest, a six-day
tour to Germany, from £998.

HF Holidays (hfholidays.co.uk)
features a selection of guided walking holidays for solos, based at its
UK country houses. In these, the whole house is set aside for the sole use
of single guests and there is no single-room supplement. Prices start from
£249 for three nights at Newfield Hall Country House in Yorkshire.

Kirker Holidays (kirkerholidays.com)
has no-single-supplement places on three of its escorted cultural tours
this year, including The Heritage History of Malta and Gozo, a
six-night tour from £1,398 per person. The others are the Kirker Music
Festival at Boughton House, Northamptonshire, and The Land Beyond the River,
an 11-night tour to Uzbekistan.

Mark Warner (markwarner.co.uk),
the holiday club operator, has some low-season departures which are free of
single supplements – like San Agostino in Greece, departing on May 26
(£879).

Martin Randall (martinrandall.com)
has a handful of tours with particularly low supplements. These include the
Dürer Riemenschneider tour, with six nights in Würzburg and
Nuremberg (from £1,960; plus £80 supplement).

Sunvil Holidays (sunvil.co.uk)
is offering single travellers supplement-free travel on trips to Greece
which involve staying in self-catering accommodation. Clients must quote “single
room offer”. Bookings must be made before March 31. For example, Villa
Irene in Corfu has two studio apartments and seven nights’ self-catering
cost from £535 per person.

Contact Nick by email: [email protected]