PCLN - Priceline Group Inc.

[cameronfen]

I have used and like priceline.  But I'm curious what the competitve advantage priceline has besides the brand name.  I dont see why I would use priceline if say orbitz offered a cheaper price.  One other thing could be inertia, if hotels just offered the same price (or cheaper) to all aggregators. 

[KCLarkin]

I have used and like priceline.  But I'm curious what the competitve advantage priceline has besides the brand name.  I dont see why I would use priceline if say orbitz offered a cheaper price.  One other thing could be inertia, if hotels just offered the same price (or cheaper) to all aggregators.

 

Please read up-thread. This has been discussed multiple times. The important thing to note is that booking.com is the product with the moat (not Priceline). So the company is now called Booking Holdings.

[Liberty]

Interesting:

 

http://www.ettsa.eu/uploads/documents/ETTSA%20Hotel%20Distribution%20Cost%20(Summary)%2002052018%20(1).pdf

 

Via: https://twitter.com/FullySynergized/status/994750046108307456

[Liberty]

Acquisition in Australia:

 

https://www.prnewswire.com/news-releases/booking-holdings-agrees-to-acquire-hotelscombined-300677574.html

[LongTermView]

This is long but it's definitely worth it: https://skift.com/oral-history-of-booking-acquisition/

[Happy]

When I went to the Berkshire meeting this year, I booked my Omaha-hotel several months in advance through Booking. The previous years I had used Expedia and had no problem. The price of my room was like $57/night. Two days before my trip, Booking wrote to me that the price of my room had been a "mistake" and that the correct price now is $105 (don't remember the exact amounts, but it was almost double what I signed up for). Either I could accept this "corrected" price within 48 hours or they would be so kind as to cancel my booking free of charge... I actually saw the email on time only because I was preparing for the trip and stumbled upon it. Else they would have just canceled my room and obviously a few days before the meeting there is pretty much no alternative left in all of Omaha. I accepted, but clearly this left a very bad impression on me. I wonder how much they do something like this. This behavior clearly concerns me as a Booking-shareholder. Has anybody heard of similar problems?

[Liberty]

Q2: http://ir.bookingholdings.com/static-files/c63b9479-1de4-49e6-b505-22cf9f14fb99

 

gross travel bookings were $23.9 billion, an increase of 15% over a year ago (approximately 11% on a constant-currency basis).

total revenues for the 2nd quarter were $3.5 billion as compared to gross profit of $3.0 billion, a 20% increase from the prior year (approximately 16% on a constant-currency basis).

Net income in the 2nd quarter was $977.4 million, a 36% increase versus the prior year.

Net income was $20.13 per diluted share, a 40% increase as compared to the prior year.

Non-GAAP net income in the 2nd quarter was $1.0 billion, a 32% increase versus the prior year. Non-GAAP net income was $20.67 per diluted share, a 36% increase compared to $15.14 per diluted share a year ago.

Adjusted EBITDA for the 2nd quarter was $1.3 billion, a 35% increase versus a year ago.

[Liberty]

200m investment in Grab:

 

https://www.reuters.com/article/us-grab-funding-booking-holdings/booking-holdings-becomes-latest-investor-in-southeast-asias-grab-idUSKCN1N31H3

[Liberty]

Q3:

 

http://ir.bookingholdings.com/static-files/2238f5fb-918c-41de-81b7-d33f8fdfd0e3

 

Third quarter gross travel bookings for Booking Holdings Inc. (the "Company," "Booking

Holdings," "we," "our" or "us"), which refers to the total dollar value, generally inclusive of taxes and fees, of all

travel services booked by its customers, net of cancellations, were $24.3 billion, an increase of 12% over a year ago

(approximately 14% on a constant-currency basis).

 

Booking Holding's total revenues for the 3rd quarter were $4.8 billion as compared to gross profit of $4.4 billion, an

11% increase from the prior year (approximately 13% on a constant-currency basis). Net income in the 3rd quarter

was $1.8 billion, a 3% increase versus the prior year. Net income was $37.02 per diluted share, an 8% increase as

compared to the prior year. Net income in the 3rd quarter of 2018 includes before tax amounts of approximately $31

million of net unrealized gains on marketable equity securities, pursuant to the adoption of a new accounting update

effective for periods beginning after December 31, 2017, and an unfavorable net travel transaction tax charge of

approximately $22 million related to prior periods, which includes approximately $1 million of interest income

from a related matter.

 

Non-GAAP net income in the 3rd quarter was $1.8 billion, a 2% increase versus the prior year. Non-GAAP net

income was $37.78 per diluted share, a 7% increase as compared to the prior year.

[wisowis]

Going over Q4 2018 portfolio changes for some funds, I noticed that Alta Rock Partners blew out their entire ($238 million) position. From 22% of their portfolio to 0. And they were still adding to the position in Q3.

 

https://whalewisdom.com/filer/altarock-partners-llc#tabholdings_tab_link

 

Wonder what spooked them.

[Liberty]

BKNG Q4:

 

http://ir.bookingholdings.com/static-files/65572aa4-8f00-4ad9-ba1e-d9f447e72285

 

Fourth quarter gross travel bookings for Booking Holdings Inc. (the "Company", "Booking Holdings," "we," "our" or "us"), which refers to the total dollar value, generally inclusive of taxes and fees, of all travel services booked by its customers, net of cancellations, were $19.6 billion, an increase of 9% over a year ago (approximately 13% on a constant-currency basis).

 

Booking Holdings' total revenues for the 4th quarter were $3.2 billion, as compared to gross profit of $2.8 billion in the 4th quarter of 2017, a 16% increase from the prior year (approximately 21% on a constant-currency basis). Net income in the 4th quarter was $646 million, or $13.86 per share, including before tax amounts of approximately $474 million of net unrealized losses on marketable equity securities, pursuant to the adoption of a new accounting update effective for periods beginning after December 31, 2017, and a $48 million income tax benefit primarily due to the one-time transitional tax on mandatory deemed repatriation of accumulated unremitted international earnings as a result of the U.S. Tax Cuts and Jobs Act (“Tax Act”) enacted in December 2017.

The $555 million, or $11.41 net loss per share in the 4th quarter of 2017 included $1.3 billion of provisional net income tax expense recorded pursuant to the Tax Act. The provisional net income tax expense was comprised of approximately $1.6 billion of income tax expense related to the mandatory deemed repatriation of estimated accumulated unremitted international earnings, partially offset by a net income tax benefit of approximately $217 million related to the remeasurement of the Company's U.S. deferred income tax assets and liabilities due to the reduction of the U.S. federal statutory tax rate from 35% to 21%.

 

Non-GAAP net income in the 4th quarter of 2018 was $1.0 billion, a 25% increase versus the prior year. Non- GAAP net income was $22.49 per diluted share, a 33% increase compared to $16.86 per diluted share a year ago. Adjusted EBITDA for the 4th quarter of 2018 was $1.3 billion, a 17% increase versus a year ago. Non-GAAP net income and adjusted EBITDA for the 4th quarter of 2018 exclude the net unrealized losses on marketable equity securities of approximately $474 million before tax. In addition, Non-GAAP net income for the 4th quarter of 2018 and 2017 excludes the $48 million income tax benefit and $1.3 billion income tax expense, respectively, related to the Tax Act, as mentioned above. The section below entitled "Non-GAAP Financial Measures" provides definitions and information about the use of non-GAAP financial measures in this press release, and the attached financial and statistical supplement reconciles non-GAAP financial results with Booking Holdings' financial results under GAAP.

 

For the full-year 2018, Booking Holdings had gross travel bookings of $92.7 billion, a 14% increase compared to 2017 (approximately 13% on a constant-currency basis). Booking Holdings' total revenues in 2018 were $14.5 billion, as compared to gross profit of $12.4 billion in 2017, a 17% increase from the prior year (approximately 16% on a constant-currency basis). International operations contributed full-year revenues of $13.0 billion, a 17% increase versus the prior year (approximately 17% on a constant-currency basis).

 

Non-GAAP net income for the full-year 2018 was $4.4 billion, a 16% increase versus the prior year. Non-GAAP net income was $92.59 per diluted share, a 20% increase compared to $77.03 per diluted share a year ago. Adjusted EBITDA for 2018 was $5.7 billion, an 18% increase over the prior year. Non-GAAP net income and adjusted EBITDA for the full-year 2018 exclude net unrealized losses on marketable equity securities of approximately $367 million before tax. In addition, Non-GAAP net income for the 4th quarter of 2018 and 2017 excludes the $48 million income tax benefit and $1.3 billion income tax expense, respectively, related to the Tax Act, as mentioned above.

[Liberty]

https://www.gurufocus.com/news/828155/why-i-bought-booking-holdings

[Guest notorious546]

does anyone have a good grasp on the potential anti-trust risks here? why is this or isn't this a major risk to the business over time?

 

https://investor.nustay.com/wp-content/uploads/Regulatory-Nustay-files-EU-complaint-against-Expedia-and-Booking.com_.pdf

https://businessblog.trivago.com/rate-parity-hotel-industry-status/

http://www.hotelnewsnow.com/Articles/25814/Bookingcom-to-amend-rate-parity-in-Europe

CPI-Verge.pdf

[Jurgis]

Looks like nobody cares about EXPE - I did not find the thread.

 

Anyway, EXPE is down 25%+ today on increased GOOGL competition and fewer free/organic search links to EXPE pages in Google search results. Trading at ~6.x% FCF/EV.

 

BKNG down 7% reporting results soon. Trading at ~5.x% FCF/EV.

 

TRIP is down 20%+.

 

I own positions in BKNG and EXPE. I'll probably add to EXPE and wait for results from BKNG possibly expecting additional drop. If anyone wants to dump/hedge now, go ahead.

[KJP]

 

BKNG down 7% reporting results soon. Trading at ~5.x FCF/EV.

 

 

I took a two-minute look at BKNG and it seems to be trading a 16x FCF/EV.  I'm sure I'm missing something.  What are your EV and FCF numbers?

[Jurgis]

 

BKNG down 7% reporting results soon. Trading at ~5.x FCF/EV.

 

 

I took a two-minute look at BKNG and it seems to be trading a 16x FCF/EV.  I'm sure I'm missing something.  What are your EV and FCF numbers?

 

I think you meant 16x EV/FCF, which corresponds to 6.25% FCF/EV.

And I meant 5.x% FCF/EV. It's a bit lower than your 6.25% FCF/EV. Chalk that to my conservatism and spending two minutes on calculating FCF/EV.

 

[KJP]

 

BKNG down 7% reporting results soon. Trading at ~5.x FCF/EV.

 

 

I took a two-minute look at BKNG and it seems to be trading a 16x FCF/EV.  I'm sure I'm missing something.  What are your EV and FCF numbers?

 

I think you meant 16x EV/FCF, which corresponds to 6.25% FCF/EV.

And I meant 5.x% FCF/EV. It's a bit lower than your 6.25% FCF/EV. Chalk that to my conservatism and spending two minutes on calculating FCF/EV.

 

Yes, that's it.  Thanks.  I wouldn't put too much weight on my 16x -- it was very back of the envelope.

[Okonomen]

Anyone who knows how many loyalty members Booking Holdings have in total? Or for that matter just booking.com? Can't find the info anywhere

[BroKon]

Here are a decent presentation and a blog post on Booking Holdings from Ensemble Capital:

https://intrinsicinvesting.com/2020/01/27/booking-holdings-playing-nice-with-the-google-monster/

 

Depsite their making a good case, and the current pricing, I cannot get comfortable with their thesis that Google Hotels won't aggressively disrupt Booking's model. Maybe if I owned Alphabet, as they do, I could get a little more comfortable, but without an a well designed and expensive loyalty program (which I think is unlikely for the moment given how much management compensation depends on next year's EBITDA growth), why would users not just switch to using Google Hotels?

[Okonomen]

Here are a decent presentation and a blog post on Booking Holdings from Ensemble Capital:

https://intrinsicinvesting.com/2020/01/27/booking-holdings-playing-nice-with-the-google-monster/

 

Depsite their making a good case, and the current pricing, I cannot get comfortable with their thesis that Google Hotels won't aggressively disrupt Booking's model. Maybe if I owned Alphabet, as they do, I could get a little more comfortable, but without an a well designed and expensive loyalty program (which I think is unlikely for the moment given how much management compensation depends on next year's EBITDA growth), why would users not just switch to using Google Hotels?

 

Google Hotels is just a meta search... Like tripadvisor. They dont do bookings. Google will never go into booking as it would require vast sales force, customer service etc. imagine having to call google due to some problem in booking your hote lstay.. No way... Im more afraid of Amazon in that regard

[scorpioncapital]

It's a good business but don't underestimate the government regulatory risk because booking has just as many apartment rentals as Airbnb. One option may be a tax which raises prices but it seems many grassroot complaint are to overtourism which would imply structural remedies , perhaps fewer available apartments or minimum rental durations which may cut out the very short term tourist market. Also, I see Facebook as a big competitor. Already I see many apartments listed in fb Groups, some of them for short or seasonal travel. If fb ever got their act together and formalized a marketplace for this it, it would be actually like free classifieds, potentially undercutting the entire business model - direct to guest .

[BroKon]

 

Google Hotels is just a meta search... Like tripadvisor. They dont do bookings. Google will never go into booking as it would require vast sales force, customer service etc. imagine having to call google due to some problem in booking your hote lstay.. No way... Im more afraid of Amazon in that regard

 

But in reality the user experience isn't that different, as the initial phase is searching for a hotel in both mediums, and then Google points you to the 3-4 cheapest prices, which may or may not include the Bookings site but does include the hotel website (with generally a best price guarantee), while Booking.com just allows you to book directly. So the user maybe saves one click using booking.com but at the cost of potentially not seeing the cheapest option.

If Booking was prepared to reinvest some of its margins into an attractive loyalty program, then I could see stickiness, but otherwise the risk is that more and more traffic goes through Google Hotels.

 

[scorpioncapital]

I'm getting quite a few offers for 10 percent off any booking above 110 usd or so. But it's sporadic and the refund can take ages to come on your card (I guess they use this as float or something). A loyalty program is a great idea..or perhaps a discount on weekly rentals.

[Spekulatius]

Google maps is the killer app for so many things - including looking for Hotels. I use it for almost everything where locations matters.

[KCLarkin]

I'm not sure why this is holding up so well today. Q1 guidance was way worse than I expected. Should be down 10%....

 

However, this has the potential for a very interesting GARP opportunity. BKNG was already trading at a fairly reasonable price, but is now facing severe (though temporary) headwinds. Right now, the market is looking through those temporary headwinds. I suspect that optimism will break. Definitely one to add to the watchlist.

 

All the travel names are pretty interesting right now. Unfortunately, the best ones like Heico, Marriott, and Mastercard are starting from very high valuations. But the worst ones, like Tripadvisor, are already at very interesting valuations.