Priceline To Offer Resort Travel Service

Priceline.com (Nasdaq: PCLN) announced Thursday that it is launching a resort getaway service that it claims will save travelers up to 40 percent off typical rates.

The Norwalk, Connecticut-based company said it was able to introduce the new category, which follows its name-your-own-price operating model, by building a "critical mass" of hotel properties.

"Offering a separate hotel category for vacation-oriented resorts is yet another example of Priceline.com listening to our customers and responding with the services they want," said Priceline president and chief operating officer Jeff Boyd.

According to Priceline, the resorts participating in the program must offer tennis courts, a spa or fitness facility, one or more pools, multiple food and beverage choices, and an on-site or nearby golf range. Resorts in coastal areas must have beachfront access in order to be included in the e-tailer's offering.

Expansion Efforts

Priceline said it has already signed up resorts in more than 10 locations in the United States, and is slated to enter markets in Mexico and the Bahamas this summer.

In March, the company unveiled a last-minute travel bookings service, expanding its offerings of airline tickets, hotel rooms and rental cars in a bid to appeal to spur-of-the-moment leisure travelers.

Priceline -- which was battered last year by a barrage of negative news, sluggish sales, the shuttering of its gasoline and grocery affiliate, and a plummeting stock price -- has implemented an aggressive restructuring plan to focus its attention on the highly competitive travel business.

Turnaround Time

The efforts seem to paying off. In first-quarter results released last month, Priceline reported a pro forma net loss of US$6.2 million, or 3 cents per share, beating analyst estimates for a loss of 5 to 7 cents per share.

The company also said that it added 891,490 new customers during the period and generated repeat business of 58 percent. In addition, Priceline's gross profits rose 23 percent compared to the fourth quarter of 2000, to $43.1 million. At the time, the e-tailer said it "remains confident" that it will turn an operating profit in the second quarter.

The better-than-expected results came on the heels of positive earnings reports posted by Priceline's chief sector rivals, Expedia.com (Nasdaq: EXPE) and Travelocity.com (Nasdaq: TVLY), which both saw first-ever profitable quarters.

Exec Shuffle

Although Priceline appears to making strides in its drive to reach profitability, the e-tailer announced last month that it was replacing president and chief executive officer Daniel Schulman, who had joined the company in 1999.

Priceline said its board concluded that Schulman's ouster was in the best interest of the e-tailer and its shareholders, in view of the company's "future objectives."

Chairman Richard Braddock reassumed the reins as the company's CEO, a position he held from July 1998 to May 2000, while chief operating officer Jeffery H. Boyd was appointed president.