After travel Web site Priceline.com Inc. issued a press release last month touting New York City bargains, some might have taken it as the desperate screech of a company buckled into a braking travel industry.
As it turns out, the Norwalk, Conn.-based company was just preaching to the choir of bargain-hunting travelers.
Founded a dozen years ago by Yonkers native Jay Walker, Priceline.com has defied the conventional wisdom by promising continued hiring in 2009 despite a sagging convention and tourism industry.
In all, Priceline.com added 150 employees in the United States last year and more than 300 overseas, giving it nearly 1,800 at the close of 2008.
Priceline.com helped travelers book $7.4 billion in reservations online last year, up by more than 50 percent from 2007. The results include its 2007 acquisition of the Asian travel site Agoda.com. The company also owns the Europe-based Booking.com Web sites.
“There”™s plenty of places left on this planet for us to bring the Booking.com brand, the Priceline brand (and) the Agoda brand,” said Robert Mylod Jr., vice chairman of Priceline.com.
Priceline.com predicted 15 percent growth in bookings in the current quarter, despite most airlines acknowledging weak demand for travel in March and April.
“One of the things that”™s happening in travel in general ”“ and I think to the airlines in particular ”“ is that they”™re starting to suffer a little bit more from a downturn in business travel,” said Jeff Boyd, Priceline.com CEO, in a conference call with investors. “That”™s driven by corporate austerity, but it”™s also driven by what I”™ll call the tone of the times that is actually pushing back against some incentive trips and business travel to resort destinations.
“I think we can run a little bit counter to some of those trends because of our value brand,” Boyd said. “Customers come to Priceline to look for no-fee airline tickets, to look for deeply discounted opaque products; and I think that has helped our demand. It certainly helped it in the fourth quarter.”
Priceline.com had a $33.3 million profit in the fourth quarter, up slightly from the same period in 2007, as total revenue climbed 21 percent to $406 million. Priceline.com expects revenue to increase between 5 percent and 10 percent in the current quarter from its totals a year ago.
For all 2008, Priceline.com earned $193 million on nearly $1.9 billion in revenue, up from $1.4 billion in 2007.
If there has been any change to traveler behavior in the past quarter, Boyd said it is that they are shopping aggressively for bargain deals, and booking reservations closer to their actual travel dates in hopes of getting a sweetheart deal.
Kayak.com, another Norwalk dot-com that searches a wide range of travel sites for discounts, found in a recent survey that the credit crunch affected the winter travel plans of half the people polled. For those determined to have a getaway, travelers are attempting to save money by leaving their passports at home in favor of U.S. destinations; scheduling trips during off-peak tourism periods; and selecting vacations that offer a free lodging component. Cruise lines, for instance, are offering steep discounts in an attempt to keep their ships full.
“People are still interested in traveling over the coming months, but we”™ve seen they”™re spending more time searching,” Brian Harniman, executive vice president of marketing and distribution for Kayak.com, said at the time of the survey. “The good news is that deals on winter and spring getaways are more plentiful than we”™ve seen in recent years. Airlines are launching winter fare sales that are lasting through spring. Hotels are lowering prices and adding value components such as free nights and vouchers for entertainment and dining.”
— Staff writer Ryan Doran contributed to this report.
