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Check, please: Priceline buys OpenTable for $2.6B

By WTOP Staff

ANNE D’INNOCENZIO
AP Business Writers

NEW YORK (AP) — Priceline has negotiated a $2.6 billion entree into the restaurant business.

The global travel booking king announced Friday it is acquiring OpenTable Inc. in a deal that would put Priceline into a new business doing for restaurant reservations much what it does for hotel bookings.

The deal should give Priceline a new way to cater to its increasingly mobile-savvy customers, while parlaying Priceline’s global reach to expand OpenTable to other countries.

“Travelers are diners,” Priceline Group CEO and President Darren Huston said on a conference call. “It’s the same customers. There’s opportunity to cross-promote brands.”

In a statement, OpenTable CEO Matt Roberts cited Priceline’s expertise in online marketing globally on all types of devices.

“They have an exceptional track record of customer service in dozens of languages around the world,” Roberts said.

Priceline will pay $103 per share, which is a 46 percent premium to OpenTable Inc.’s Thursday closing price of $70.43.

Shares of OpenTable soared $34.05, or more than 48 percent, to close at $104.48 Friday. Priceline shares fell $36.70, or 3 percent, to $1,189.30.

Priceline, which generated sales of $6.8 billion last year, has made a series of acquisitions over the last decade, most recently last year’s purchase of Kayak.com, an online travel site. The acquisitions focused on travel — until now.

During the conference call Friday, Huston noted the latest deal doesn’t signal it’s going on any acquisition binges. In fact, Priceline’s main business is still growing well, he said. But he noted OpenTable offers an opportunity to increase the size of its market.

In an interview with The Associated Press, Huston said the company has seen OpenTable as an acquisition target for many years. But the time was right now.

OpenTable seats more than 15 million diners per month at more than 31,000 restaurants. It allows users to make free reservations at restaurants through its website and mobile apps. It makes money by charging restaurants fees for the bookings. Users can also read reviews and view menus through the website or mobile app.

OpenTable, founded in 1998, has enjoyed double-digit growth for the past several years and generated revenue of $190 million last year. That’s up 18 percent from the year before and more than triple its 2008 revenue of $55.8 million. In 2010, it purchased toptable.co.uk, a similar site in the United Kingdom.

OpenTable will remain headquartered in San Francisco and will operate as an independent business led by its current management team.

Huston said Priceline’s first goal is to expand OpenTable internationally. Users can already book restaurants in London, Berlin, Hong Kong and other cities, but Huston said it is seeking to add more cities. Because Priceline already has “offices in every major city in the world,” doing so should be seamless, he said.

OpenTable also is working on making it easier to sign up new restaurants to its service, said Huston. The company is creating a cloud-based system instead of using the hardware it now needs restaurants to install to use OpenTable.

At Priceline, an average of more than 1 million guests stay in accommodations booked through one of its brands each night. Its brands include Booking.com, priceline.com, agoda.com, and rentalcars.com and it has relationships with more than 480,000 properties in more than 200 countries and territories worldwide.

Brian Sozzi, of Belus Capital Advisors noted that competition for OpenTable has increased from services including Grubhub.com and Ureserv.com, but OpenTable still dominates in a fragmented market.

“This will be a one-stop solution to the customers,” he said. He noted that Priceline is becoming like an Amazon.com to travelers.

Huston said that the next big wave is tackling ways to use mobile technology to enhance the dining experience.

OpenTable is testing a service where the diners’ phone is connected to the restaurant’s payment system, he said. That means that as diners order they can see the bill increase as they order more and can pay without ever having to interact with the waiter. He said Priceline will help to expand that test around the country.

The Norwalk, Connecticut, company changed its name from Priceline.com Inc. to Priceline Group Inc. in April to better reflect the breadth of its business.

Both boards of Priceline and OpenTable unanimously approved the deal, which is targeted to close in the third quarter.

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AP Business Writer Michelle Chapman contributed to this report in New York.

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Follow Anne D’Innocenzio at http://www.Twitter.com/adinnocenzio

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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