Booking.com, part of the Priceline Group, has for the first time officially claimed market leadership in Australia, confirming online stats that show it has surged past former market leader Wotif, which today announced a 15% fall in profit for the 13/14 financial year.
“Both Agoda.com and Booking.com continued to strengthen the Group’s position in the Asia Pacific region, particularly among international travelers,” Priceline CEO Darren Huston said.
“We are making excellent strides in North Asia and Booking.com has become the largest online accommodation service in Australia.
“This region of the world continues to contribute to higher overall Group growth, as it increases its share of our worldwide business.”
Mr Huston said the Priceline Group reported consolidated gross bookings for the second quarter of approximately USD13.5 billion, up 34% year-over-year, or about 32% on a local currency basis.
“Non-GAAP net income was USD667 million; up 31% year over year, and earnings per share was USD12.51, up 29% versus prior year .
“Our customers booked accommodation reservations for 90 million room nights in the quarter, up 29% year over year.”
He added that Priceline’s vacation rentals business is performing strongly.
“We are rapidly expanding our footprint of vacation rentals, and we now have over 190,000 directly bookable self-catered properties.
“In the last 12 months, our customers spent over USD4 billion on vacation rentals that they booked primarily through Booking.com, but also on our experimental site, Villas.com.”
Much of Priceline’s growth has been driven by aggressive online advertising (for which the ROIs are decreasing) increasingly supplemented by offline marketing, such as TV
CFO Daniel Finnegan confirmed this would continue.
“We estimate that the Group will spend roughly USD130 million for offline advertising over the back half of the year, with more than half the spend coming in Q3.”
Meanwhile, the Wotif Group reported a 15.4% drop in net profit to AUD43.2m for the year to June 30 despite a small increase in revenue of 2.1% to AUD149.6m.
The major cause was 10.8% slump in room night sales to 6.04m, with a fall in its core Australia New Zealand markets of 9.4%.
CEO Scott Blume commented: “The competitive landscape for our business continued to evolve and rapidly change during the financial year.
“Revenue gains were predominantly driven by a commission increase (from 11% to 12% from Jan 2014) and an average room rate increase but overall results were negatively impacted by (the) decrease in room night sales.”