Priceline introduces TravelJigsaw, next would-be global online travel brand

Priceline acquired a majority stake in Manchester, U.K.,-based TravelJigsaw May 18 and in the remaining six weeks of the second quarter, the European and North American car rental service contributed $43.9 million in gross travel bookings to Priceline’s top line.

Speaking during Priceline’s second quarter earnings call Aug. 3, President and CEO Jeffery Boyd said the company intends to turn TravelJigsaw into a global brand and will give it a “fair degree” of operational independence, as the parent company does with Booking.com and Agoda.

Priceline may look in the future to running TravelJigsaw advertisements on other Priceline websites, but the goal is for the car rental site to build its own brand and customer base, he said.

TravelJigsaw’ contribution to Priceline is minor, for now, and would be slightly accretive to earnings for the rest of the year, officials said.

Priceline did $3.4 billion in gross travel bookings in the second quarter, with U.S. gross bookings up 19.6%, and international gross bookings climbing 67.1%, on a local currency basis.

Priceline said the second quarter was another one characterized by gains in hotel market share, with 23.2 million room nights sold, an increase of 48.2%.

“We are pleased with the hotel transaction growth we are seeing worldwide, which we believe is being driven by geographic expansion, solid execution in promoting improved conversion on our websites and benefits of group-wide cooperation on integration initiatives,” Boyd stated. “These factors, combined with growing Internet commerce and travel in some of our newer markets, resulted in resilience in the face of economic volatility and periodic travel disruptions, and we believe provide a foundation for growth over the long-term.”

That rise in hotel room nights actually was a deceleration from the first quarter, largely due to the ash cloud and political disruptions in Thailand, a key Agoda market, officials said.

Overall, Priceline;\’s net income rose 71% to $114.6 million on revenue of $767.4 million, a 27.1% increase compared with the year-earlier period.

Turning to other issues of the day during a question and answer session, Boyd was asked about several potential threats — the Google-ITA Software deal, the increased importance of Travelocity and Expedia as opaque-inventory vendors, and possible inroads by competitors in the mobile channel.

Boyd said Priceline takes Google at its word that its intent with the ITA Software deal is to improve the customer experience in travel search and to deliver more qualified leads to advertisers.

“If that’s how things shake out, it could be a win for Google and the online travel agencies,” Boyd said.

However, he added that the Google-ITA deal could become a competitive threat “over time.”

Boyd doesn’t see any big impact from Travelocity’s Top Secret Hotels or Expedia’s introduction of Expedia Unpublished Rate hotels at this juncture, but they, too, like ITA-Google, could turn into a “concern for the future,” Boyd said.

The Priceline CEO said he’s pleased with the company’s efforts in mobile apps, with their focus on last-minute hotels and cars, and noted that it’s important for Priceline to hold its own in mobile because companies can steal share by becoming dominant in an emerging channel.