When Priceline rode in and swept up the restaurants…
In the wake of recent acquisitions by Priceline, Phil Butler puts questions to Glenn Fogel and then attempts to read between the lines
Recent acquisitions by Priceline have shaken up the travel agency space, promoting some to foretell the death of OTAs as we know them. Priceline’s $103/share bid acceptance for OpenTable being the latest ‘good news’ for what’s becoming the biggest all-in-one travel shop, is but one cog in a machine speeding past standard booking commissions for revenue.
To learn more, EyeforTravel approached Glenn Fogel who has been with the group for 14 years and now heads up worldwide strategy and planning. Wearing this hat, Fogel is responsible for the company’s global mergers, acquisitions, and strategic alliances.
We spoke with Fogel about the OpenTable restaurant booking piece of their product package, but also the recent buuteeq hotel marketing suite acquisition with the aim of establishing how these new ‘tools’ fit into the overall Priceline strategy/value proposition. Here goes.
EFT: What does the buuteeq acquisition mean for Priceline’s overall strategy? How do you think your competition will view including hotel marketing in the Priceline mix?
GF: The Priceline Group’s strategy is based on delivering best-in-class products and solutions to our consumers and our partners. Buuteeq is a team of highly talented engineers, which we think will be an asset to many of our hotel partners looking to connect directly with their own customers in real-time across all digital platforms.
EFT: Is it fair to say Priceline is close to becoming an all-in-one travel service?
GF: We’ve always taken a 360-degree approach to the solutions we provide our partners, so this isn’t really a deviation of strategy. We help our partners grow their business, and we are constantly looking for new ways to innovate how we do this.
EFT: Given Priceline’s monetary and customer satisfaction successes, are we looking at ‘one top’ travel shopping as a successful model for mobile? In mobile, how does buuteeq fit into the mix?
GF: Mobile has been a core focus for us for many years, as consumers increase their search and booking activity across all devices – from phones to tablets to desktop browsers. Our ultimate goal is to ensure a seamless experience for customers across all devices, no matter what they are searching for across our suite of services from all of our businesses.
EFT: Will OpenTable continue to be a ‘standalone’ product, or part of a more complete Booking.com or other Priceline suite of services?
GF: OpenTable will operate as an independent business within the Priceline Group, just like our other major brands. As with all of our brands, we will examine the best ways to work together to achieve the best results for our customers, partners and all stakeholders.
EFT: It’s interesting that to date restaurants have been largely overlooked by OTAs, and even travel guide sites and digital businesses. Can we expect to see greater competition for dinner bookings and the like in the month to come?
GF: Over the last two decades all services have had to migrate from offline to online. Some verticals have been transformed faster than others and some have transitioned more slowly. At the same time, many growing digital companies have expanded their scope of business, moving out of their original core. Whether it is restaurant reservations or other services, competition is a fact of life and one can never be complacent. Truly, it is anyone’s prerogative to guess what happens next.
EFT: Analysts and other experts must be wondering about now; what’s next for Priceline? Acquisition or ‘build’ wise, are you guys looking to add tours, packages, extreme travel etc?
GF: There is still so much opportunity for us to organically grow our businesses. Travel is a trillion dollar industry and we currently own a fraction of that, so it’s safe to assume that organic growth will be a continued focus for us. Will we continue to make acquisitions? If and when we see opportunities to supplement our organic growth strategies, we will certainly consider them, as we always have.
EFT: Some marketing experts out there have already expressed a concern about Priceline’s apparent advantage over advertising, marketing, and even PR for hotels. Have you guys talked about potential conflicts in delivering marketing, ads, and ‘product’ B2C and B2B?
GF: Our goal, as previously stated, is to provide best-in-class products and solutions to our consumers and our partners. And in this context we try to make sure to take into account and evaluate all factors.
So, the Priceline strategy guru has not revealed the core workings or plans of his company for readers. Or maybe he has? Competition, Fogel points out, forces companies large and small to not enter into the ‘cost’ game, but also to offer the products and services that differentiate companies like Priceline from competitors. This simple dynamic of business, has resounded rhythmically not just from Priceline, but from competitor Expedia too. CEO of Expedia, Dara Khosrowshahi mirrored some of Fogel’s wisdom when Expedia entered into partnership with car rental company Sixt last month.
"In partnering with Sixt, we can better serve our customers across the globe with a large premium car rental fleet and great service - a winning combination."
For consumers, whether or not these global giants are in a race to acquire or not, the early value will certainly be more choices with less hassle hunting for that mobile icon to ‘click’ for a booking. As for service providers, it remains to be seen how commissions, marketing and the overall ‘value’ mix from these companies will pan out. Only one thing seems certain, the revenue hunt is still on where mobile is concerned.
Let’s hear your thoughts in the comments box below.
Phil Butler is editor-in-chief of Everything PR News, CEO of Argophilia the online travel development company, and co-editor of Argophilia Travel News. He’s widely cited on beta startups, search engines and marketing, and a contributor to Social Media Today, The Huffington Post, The Epoch Times, and other media outlets. His views are his own