The macroeconomic environment in the U.S. wasn’t kind to the travel industry during the 2007-09 downturn. The subprime mortgage mess and ensuing financial markets collapse led to economic growth rate plummeting and high unemployment levels that led to a steep decline in disposable income levels. Amid such harsh conditions, one wonders what could have possibly led to such an impressive performance of Priceline’s stock? The answer to the enviable performance of the leading U.S. online travel agency lies outside of the U.S., in the fragmented and largely untapped Asian market. International hotel bookings through Priceline.com and its subsidiary websites contribute nearly 60% of total gross bookings volume and nearly 67% to the consolidated operating income. Priceline’s strategic acquisition of Agoda in 2007 strengthened its foothold in the South Asian hotel bookings market and unlocked huge growth potential which is reflected in the stock price trajectory.
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