"Dramatic e-commerce growth" positions Europe ahead of Asia
Published: 27 Mar 2008
TDS Europe 2008 Special: Interview with Glenn D. Fogel, MD International, Priceline
Priceline firmly believes that its wide geographic reach, new market initiatives and extensive inventory are providing sustained impetus for growth.
The company’s network of businesses and affiliates now operates in over 60 countries throughout North America, Europe, Asia, the Middle East and Africa, with content available in 22 languages. Earlier this year, Priceline stated that it is currently well-positioned to continue building out its global hotel business with new inventory and geographies and mining the synergies available when it build links among its regional businesses in the United States, Europe and Asia.
In advance of the European Travel Distribution Summit in May, EyeforTravel’s Ritesh Gupta spoke with one of the event’s keynote speakers, Priceline’s Glenn Fogel, about how the company is positioning itself in the global marketplace and where he sees the challenges and opportunities over what is anticipated to be a turbulent year ahead.
On why priceline's services are relatively more attractive to suppliers and consumers in times of economic difficulty and what makes the company stand out with rising global presence, Fogel said, "In 2007, priceline.com had gross travel bookings of $4.8 billion. Of that $4.8 billion, $2.6 billion, which is more than half, came from our international operations, so international is now a very large part of our overall business."
"As a brand, priceline.com historically appeals to the segment of the consumer population that is looking for the best possible deals on travel. Recent actions like the elimination of booking fees on published-price airline tickets reinforce that positioning, as does our popular Name Your Own Price opaque travel services. When suppliers have extra unsold inventories, they like to sell that inventory through priceline's opaque channels, because it can be done privately and doesn't affect their retail pricing. Often, it is these times of economic uncertainty when suppliers have more excess inventory," added Fogel.
"Furthermore, a recent survey of European hotel operators published by the investment banking firm of Piper Jaffray, said that our European subsidiary, Booking.com, was "viewed most favorably by the hotels given [our] supply friendly traits including low commissions and flexibility." So it is not just us who thinks that we provide a good service to suppliers," Fogel told EyeforTravel.com's Ritesh Gupta.
Recently, Expedia CEO mentioned that China and India are the most tempting geographic targets. But eLong widened its fourth quarter loss, while in India there are concerns about profitability with the industry asking when is the VC funding going to stop and how the OTAs intend to focus on `cash flows'. Though Fogel didn't categorically comment about India and China, he said with the acquisition of Agoda.com and its operations in the Asia Pacific region, Priceline now has a foothold in the market and it intends to grow it.
"And we believe all the Asia markets are attractive long-term. However, we should not forget that in terms of absolute volume growth, Europe is experiencing more dramatic e-commerce increases right now," he pointed out.
Last year, search engines in the US strengthened their Web 2.0 applications, in some cases via inorganic growth through acquisitions of social networking, review/ ratings sites and UGC sites. On how similar developments can emerge in Europe, Fogel said many European travel sites are already there and cited example of subsidiary Booking.com, which offers a collection of hotel reviews from its customers and that database of information continues to grow.
But with reference to building pan-European 2.0 brands, Fogel believes their development will take more time, "Since the viral effect is so important, it might take a bit longer for pan-European 2.0 brands to gain the necessary traction but some of the sites have gathered a significant number of visitors in a relatively short amount of time. How well and how quickly that traffic will be monetised is an interesting question."
Where and how travel companies should invest in the economic downturn, and how social media and Travel 2.0 sites can be motetised will be two of the key debates taking place at EyeforTravel’s 11th annual Travel Distribution Summit, taking place on 20-21 May at the Business Design Centre in London.
For more information about the event, click here: http://events.eyefortravel.com/tds/travel-distribution-summit-overview.a...
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