Piper Jaffray Reiterates PCLN As Top Large Cap Travel Pick

In its U.S. online travel guide, Piper Jaffray reports that the “outlook for the domestic hotel industry continues to be positive, with Smith Travel research expecting 4%/7% room rate improvement in 2011/2012 from flat in 2010, which should benefit the OTAs.”

“Preliminary industry hotel RevPAR in February was up 8% y/y (+3% y/y room rate increase) vs. 8.7% y/y (+2.8% y/y room rates) in January,” Piper Jaffray writes.

“Air traffic grew 3.3% y/y during the month. Web traffic improved modestly across-the-board, down 5% y/y for Expedia Inc. EXPE (-12% in Jan.) and down 3% y/y for Priceline.com PCLN (-6% y/y in Jan) in the month February. We reiterate PCLN as our top 12-month large cap pick given strong international (~75% of company earnings) growth trajectory.”

Priceline.com closed Thursday at $464.41; Expedia closed at $21.47.