The Priceline Group has changed its name to Booking Holdings, with the group telling investors that it would invest in adding new supply, taking Amazon as inspiration.
The company said it was working to provide “holistic frictionless travel” to its customers, making its way deeper into the travel funnel with services such as car hire and experimenting with experiences.
Booking Holdings attributed the name change to the dominant role which its booking.com brand played in driving its business.
The group is now looking to expand deeper throughout travel. Glenn Fogel, CEO, told analysts: “Providing holistic frictionless travel for our customers remains a long-term goal and we are making investments this year to help us achieve this vision. Providing an integrated ground transportation offering is a part of this holistic travel concept.
“We were experimenting with providing in-destination experiences and currently have tests running in multiple markets. Whether you want to visit a museum or book a tour, Booking.com wants its mobile app to eventually become the centre of your entire travel experience. It is extremely early days for us, but we are excited about the long-term potential in this area.”
The company has looked to Amazon for inspiration, with Fogel adding: “It’s just wonderful the way so many people go directly to Amazon … that’s a great thing for us to aspire to be able to do” He added: “I don’t know if we’d ever get there or not, but I certainly know that the way to try and get there is always providing a better service, the best selection, most breadth, the best prices, great customer service, getting rid of the friction, and then God forbid, anything goes wrong, anything goes wrong, you fix it.”
The company’s flagship brand has changed its property classifications into two categories, the first representing more traditional accommodations, including hotels, motels and resorts; and the second, encompassing alternative accommodations, including homes, apartments and other unique places to stay.
Booking.com added over 470,000 properties last year and ended the year with almost 1.6 million properties on its website and mobile app, while increasing its alternative accommodation by 53% on the year. The CEO told analysts that the company planned to “aggressively expand” its supply of alternative accommodation.
Fogel underlined the benefits of having both the alternative accommodation and the traditional accommodations on the same page and of ensuring that all options were instantly bookable. He said: “That’s a big thing for a lot of customers. I’ve done it myself with some other services, where you go back and forth, back and forth, emailing. And then you find out the person doesn’t really want to rent it to you. It’s a horrible experience. So that’s why we have all of our Booking.com alternative accommodations are 100% instantly bookable.”
Commenting on Airbnb’s decision to expand its platform to include boutique hotels, Fogel said: “We’ve been facing competition of all sorts for a long time. I don’t see that one company coming in and saying they’re going to offer a certain number or a small number of select hotel-type properties as a big issue.”
In addition to investing in adding supply and raising the brand profile, last year saw the company
accelerate investments to build a new payments platform at Booking.com. Fogel said: “This initiative, in which we are in the very early stages and expect to continue to invest in throughout 2018, is important as we expand our merchant capabilities and give our property partners and customers more flexibility with respect to payment options.”
The company reported that room nights booked had grown by 16.8% on the year in the fourth quarter, a drop from the 18.6% growth seen in the third quarter. Average daily rates were down about 1% on the year, in line with previous forecasts. Adjusted Ebitda for the quarter was up 23% on the year to USD1.1bn above the top end the guidance range of USD910m.
For the first quarter, Booking expects gross travel bookings to climb 14.5% to 18.5%, with an 8% to 12% rise in hotel room nights booked. Easter falling on April 1 was expected to benefit the first quarter, while hitting the second.
HA Perspective [by Katherine Doggrell]: Nary a week goes by without a company wanting to become the Amazon of travel and here at the newly-renamed Booking Holdings things are no different. And why not – it’s everyone’s one-stop shop. But for consumer goods, not for the more nuanced purchases of travel. Where Amazon has succeeded is with one-click ordering and next-day delivery. The former is an area the OTAs are sector leaders at – with more on the way at Booking – while the latter is irrelevant.
But it’s not just about the purchasing process, which is one of the reasons why Amazon has, thus far, been unable to make a go of travel, despite repeated efforts. And its not just content. As Accor noted elsewhere this week, it had been unable to make a success of its own Amazon efforts expanding its own platform to include independents.
The battle now is to become that brand which provides the full funnel experience, with Booking expanding into experiences, Airbnb into hotels and all points ramping up their brand marketing budgets to persuade the consumer that nowhere else will do. Only hotels seem focused on just selling hotels.
Which leaves that largely silent partner, Google. What it decides to do next is more likely to influence the market than a former bookseller.