Priceline reports 1st quarter lift but $10m volcano hit

Priceline Inc’s international businesses, booking.com and Agoda.com, accountd for $2 billion of gross bookings during the first three months of the year, a 73% increase on the same period last year.

Including its US business, gross bookings, which includes all fees and taxes, totalled $3 billion, the US giant announced today in a first quarter update.

Room nights booked across the entire business came in at 20 million for the first three months of the year, although there was no breakdown between international and US room nights.

Chief executive Jeffrey Boyd said that the 20 million return maintained Priceline’s global dominance of the online hotel booking sector, both in volume and year-on-year growth terms. “Our nearest rival booked 16 million,” he said.

Boyd acknowledged that ebookers, which recently reported a first quarter increase in stayed room nights of 80% – was seeing “a good turnaround” but that it was “growing from a small base compared with us and Expedia”.

Despite its dominance, Priceline insists that it can continue to grow, although it acknowledged a “deceleration in the sequential growth rates”  moving forward.

The 20 million room nights booked in the first quarter was 57% ahead of the fourth quarter of 2009, which in turn was 60% ahead of the third quarter of htat year.

Priceline’s international growth will continue to be driven by “the roll-out of its global hotel platform, customer acquisition and brand development”. Currently, booking.com has around 86,000 bookable properties.

During today’s first quarter update, Boyd and chief financial officer Dan Finnegan talked about a number of external challenges.

Finnegan said that the impact of the ash cloud during April would result in a $10 millio hit to its pro forma EBITDA return in the second quarter, adding later that it lost around $50 million in gross bookings from cancellations alone.

He said that it was impossible to quantify the amount of foregone bookings – namely people who were planning to travel but hadn’t yet booked.

Other costs which will influence the EBITDA were increased volumes at its booking.com call centre and no-shows.

Priceline bosses also insisted there was “no material impact” from the Greek debt crisis, while currency fluctuations were not a big concern. “Most of booking.com’s business is intra-Europe,” Boyd said.

Overall, Priceline Inc’s $3 billion of gross bookings generated revenues of $584.4 millio, 26.5% ahead of quarter one in 2009, and a gross profit of $319.1 million (+53.2%).

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