Aug. 09 - Priceline's strong results are bringing new attention to the online travel business, which despite the rocky economy, continues to grow. Bobbi Rebell reports.
Tight budgets or not- the travel business is going strong this summer, as vacationers around the globe log on - and take time off. The proof? Priceline- which thanks in large part to its international brand Booking.com- checked in with very strong profits. Its stock- hovering near the $1000 mark is the talk of Wall Street. Susquehanna Financial's Brian Nowak has a target of $1135. SOUNDBITE: BRIAN NOWAK, SENIOR RESEARCH ANALYST, SUSQUEHANNA FINANCIAL (ENGLISH) SAYING: "They are showing an ability to continue to drive the overall online hotel market in Europe and in Asia, and really now even starting more so in the U.S. They are doing it in a profitable manner too. So they are giving investors both faster top line growth, as well as the profitability coming through." He says hotels are where the money is these days- and given that only about a third of hotels are booked online- there's a lot of opportunity left. Orbitz - which mainly plays in the airline booking space- saw a jump in its earnings thanks to the higher-margin hotel and vacation packages it sells. The stock shot up as well- after Orbitz raised its revenue outlook. But Expedia has hit turbulence, as has its stock, in large part because of focus on the U.S. market- which is more vulnerable to economic fluctuations. S&P Capital IQ's Scott Kessler: SOUNDBITE: SCOTT KESSLER, EQUITY ANAYST, S&P CAPITAL IQ (ENGLISH) SAYING: "In the U.S., for example, if there was sort of a dire economic environment you definitely would see a lot less travel activity. However, in Europe it's really part of the culture where people are taking vacations and traveling and maybe -sure, they are going someplace more regionally but they are still staying in hotels, and they are still perhaps renting a car from one place to the other." Also on the crowded playing field- Trip Advisor. The former Expedia subsidiary is taking away traffic that used to go to Expedia as users tap into other vacationers recommendations.