Expedia for No.1 in online travel

A report by travel market research firm PhoCusWright says Expedia might soon lose its standing as the world's top online travel agency to fast-charging Priceline (PCLN). The study says Priceline could knock Expedia out of the No. 1 slot by year-end. Priceline has picked up speed the past several years from its successful penetration of Western Europe's travel market, where it's gaining consumers in Britain, Germany, France and other countries, says Carroll Rheem, PhoCusWright's research director. "The real impact wouldn't be until 2013," Rheem said. Priceline's been outpacing Expedia in global gross bookings since Q2 2010. It passed Expedia in international revenue last year, Rheem says. Priceline's Asian Expansion For the first half of 2011, Expedia reported gross bookings of $15.25 billion, up 14% from the year-earlier period. Priceline had $10.45 billion, up 64%. No. 3 Orbitz (OWW) fell 1%, to $5.97 billion. The other big online travel agency is Travelocity, a unit of privately held Sabre Holdings, which doesn't release financials. Priceline's international, or non-U.S., gross bookings soared 89% in the first half of 2011 vs. the first half of 2010. Expedia and Orbitz, in comparison, saw international global bookings increase by 28% and 29%, respectively. On Feb. 9, Expedia said its Q4 international gross bookings rose 14.6% from Q4 2010, to $2.5 billion. But that was down 18% from Q3 2011. International bookings made up 39% of Expedia's total bookings in Q4 vs. 38% in Q4 2010. Priceline has other things to smile about. Recent euro zone debt woes have yet to make a real dent in its European bookings. Priceline is also continuing to penetrate Asian markets through its Bangkok-based unit, Agoda.com, Rheem says. Though it sells little in China, analysts say Priceline does a solid business selling hotel rooms in popular tourist spots in Southeast Asia and Australia. Rheem also says Priceline is well poised for a softer market in the wake of Europe's debt crisis. She sees cash-wary consumers opting for shorter vacation trips to local cities, which could ramp up business for Priceline's Amsterdam-based hotel-room seller, Booking.com. Yet, Rheem says certain longer-term factors favor Expedia in the race vs. Priceline. She says Expedia has a big footprint in China through its local unit eLong (LONG) . It also signed a partnership with budget airline AirAsia in March 2011 that gives it exclusive distribution rights to sell tickets on Air Asia and its long-haul associate airline, AirAsia X.