Though Priceline (NASDAQ:PCLN) is one of the few names people think for online travel services along with competitors Expedia (NASDAQ;EXPE), Travelocity, and Orbitz (NASDAQ:OWW), air travel bookings make up less than 2% of our $479 Trefis price estimate of Priceline’s stock. The real gem here is hotel bookings which constitutes a dominant 91% of its value.
Priceline is the second largest online travel agency in the world after Expedia in terms of booking volumes. Through its online travel portals such as Priceline.com, booking.com, agoda.com, rentalcars.com, breezenet.com and lowestfares.com, Priceline provides consumers with travel services that include bookings for hotel stays, airline tickets, vacation packages, car rentals and cruises.
Priceline makes money by charging a percentage of the dollar value for bookings. Hence, the factors that drive this division are average airfares (value of bookings), Priceline’s commission (%) on air ticket bookings and the expected future air ticket bookings. Overall air
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