TripAdvisor shares surge on Priceline partnership

At first, booking sites such as Booking.com – owned by Priceline Group – and Expedia refused to join Tripadvisor’s instant bookings platform.

TripAdvisor debuted its instant-booking platform in June 2014, giving visitors to the travel-review site a way to make bookings as well.

Two of the world’s biggest travel companies – Tripadvisor and Booking.com – have announced a strategic partnership that sees new battle lines drawn between the leading online brands.

Millions of TripAdvisor users coming to the site to plan, compare prices and book their trip will be able to instantly book options from The Priceline Group’s global hotel inventory in addition to the 235,000 properties that are already instantly bookable on TripAdvisor.

“We view this partnership as a major strategic change for the industry and a further validation of TripAdvisor’s instant booking platform”, Barclays Capital analyst Chris Merwin said.

Now what: On the surface, this expanded selection and friendly partnership is great news for TripAdvisor, particularly as its easy-to-use Instant Booking platform represents a key way for the company to boost appeal to users of mobile and wearable devices. TripAdvisor, which didn’t disclose terms of the deal, said it could eventually get access to Priceline’s other websites. TripAdvisor will then let consumers know that their hotel booking is being powered by Booking.com, and Booking.com will handle all the customer care related to the transaction.

Thirdly, the deal would diversify Priceline’s traffic sources. The firm notes that Google Hotel Ads Commission program announced a key expansion last month.

Meanwhile, topline synergy and accretion from recently acquired Wotif, Travelocity, and Orbitz, along with good execution on the core business remain tailwinds for the travel agent in the near-term. While he maintains $140 price target, the consensus Street price target for the stock is $130.77.