You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
By law, Germans get at least 20 days of vacation annually. In France and Spain, it's 30 days. All this excess European idle time means that the European travel market is much larger than in the U.S., about $325 billion a year there, compared with about $225 billion here. Yet, only 10% of continental travelers book their trips online, says Christopher Gutek, a Morgan Stanley analyst. He expects that figure to triple over the next five years.
Online travel agencies such as Expedia, Sabre and Priceline.com have aggressively expanded their European operations to seize more market share. But Priceline, the smallest of the large online travel agencies, is the dominant player, Gutek says. Priceline has distinguished itself from the pack in Europe with lower commissions and better payment arrangements for customers and hotels, he says. It claims commissions of 10% to 15%, allows customers to pay for hotel stays at check-out and lets hotels pay the company after the client has left. Competitors, on the other hand, claim commissions of up to 40%, charge customers for hotel stays upfront and pay hotels well after their clients have checked out, Gutek says.
Strength in Europe was evident in Priceline's first-quarter performance. Travel bookings in the U.S. were up 10%, but up 100% in Europe. The Norwalk, Conn., company expects profits from Europe to make up more than half of this year's earnings. Analysts expect Priceline (symbol PCLN) to earn $1.65 a share this year, according to Thomson First Call.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Priceline is known for its name-your-price approach to selling airline tickets, hotel rooms, car rentals, vacation packages and cruises. Under this system, customers enter prices they are willing to pay into Priceline's Web site. Customers don't know the details of their travel arrangements until the price is accepted. If the price bid by customers is not accepted, they must enter a new price. Such blind bargaining does lead to discounts, but the company has seen more rapid revenue growth from its traditional online travel agency. The shift makes the name-your-own-price business "less and less relevant," Gutek says. He thinks Wall Street analysts have underestimated the worth of Priceline's traditional online travel agency because of its name-your-own-price reputation.
Gutek assumed coverage of Priceline from Mary Meeker, Morgan Stanley's well-known Internet analyst. He raised Morgan Stanley's rating from "equal-weight" to "overweight" and set a target price of $38 on Monday. His timing was unfortunate, however. The shares dropped 7%, to $29.31, in a broad market sell-off. Despite the fall, the stock is up 28% year to date. In 1999, Priceline shares sold for $990.
--Thomas M. Anderson
-
Dow Leads in Mixed Session on Amgen Earnings: Stock Market TodayThe rest of Wall Street struggled as Advanced Micro Devices earnings caused a chip-stock sell-off.
-
How to Watch the 2026 Winter Olympics Without OverpayingHere’s how to stream the 2026 Winter Olympics live, including low-cost viewing options, Peacock access and ways to catch your favorite athletes and events from anywhere.
-
Here’s How to Stream the Super Bowl for LessWe'll show you the least expensive ways to stream football's biggest event.
-
If You'd Put $1,000 Into AMD Stock 20 Years Ago, Here's What You'd Have TodayAdvanced Micro Devices stock is soaring thanks to AI, but as a buy-and-hold bet, it's been a market laggard.
-
If You'd Put $1,000 Into UPS Stock 20 Years Ago, Here's What You'd Have TodayUnited Parcel Service stock has been a massive long-term laggard.
-
How the Stock Market Performed in the First Year of Trump's Second TermSix months after President Donald Trump's inauguration, take a look at how the stock market has performed.
-
If You'd Put $1,000 Into Lowe's Stock 20 Years Ago, Here's What You'd Have TodayLowe's stock has delivered disappointing returns recently, but it's been a great holding for truly patient investors.
-
If You'd Put $1,000 Into 3M Stock 20 Years Ago, Here's What You'd Have TodayMMM stock has been a pit of despair for truly long-term shareholders.
-
If You'd Put $1,000 Into Coca-Cola Stock 20 Years Ago, Here's What You'd Have TodayEven with its reliable dividend growth and generous stock buybacks, Coca-Cola has underperformed the broad market in the long term.
-
If You Put $1,000 into Qualcomm Stock 20 Years Ago, Here's What You Would Have TodayQualcomm stock has been a big disappointment for truly long-term investors.
-
If You'd Put $1,000 Into Home Depot Stock 20 Years Ago, Here's What You'd Have TodayHome Depot stock has been a buy-and-hold banger for truly long-term investors.
