Priceline Group CEO confirms Rocketmiles deal

After weeks of “no comments” and general shrugging of shoulders, Priceline Group‘s deal to buy Rocketmiles is official.

Rocketmiles, which incentivizes hotel bookings through mileage bonuses with over two dozen airlines, will become another of Priceline Group’s acquisitions alongside those for Buuteeq and Hotel Ninjas.

Although Priceline has remained tight-lipped for the past month about the acquisition, following a speculative report in the Wall Street Journal, CEO Darren Huston confirmed and briefly discussed the deal onstage at ITB Berlin last week.

The rumored $20 million transaction price has not been confirmed, despite repeated attempts to speak with Priceline and RocketMiles. But a source familiar with the deal said that the reported figure was broadly close.

The travel startup (TLabs here) has made a name for itself in the two short years of trade, pushing aggressively into Vine marketing with the #vacationfaster moniker that urged users to book hotels with them in order to save more miles for vacation travel.

The focus was primarily on business travelers who are on the road and missing time with family and friends; by booking hotels with Rocketmiles, users could then get on to the leisure travel more quickly and affordably.

The price tag for the startup came in at a cool $20 million, which is a fairly healthy exit for a young startup that had received a total of $8.5 million in investment (there was some seed from Atlas Ventures and a much larger Series A).

It’s not an enormous return on that money, but it’s a positive e that will surely be given more runway and oxygen to thrive within the Priceline Group platform.

The appeal for Priceline is clear, as the Rocketmiles platform was one huge enticement away from direct bookings with hotels.

If Priceline can induce more users to stay away from direct supplier bookings, the company’s competitive advantage is preserved through a larger, more loyal customer base.

An expanded customer base then also acts as leverage during contract negotiations and ensures that Priceline maintains relevance and profitability despite ongoing consolidation by other players in the space — namely, Expedia’s dual strikes at quickly gaining share through its purchase of both Travelocity and Orbitz.

At this point, it seems to be Priceline’s game to lose, not least if Expedia triggers its own loyalty service acquisition strategy, as some are predicting, and moves in on rival brands to Rocketmiles.

However, the volleys keep coming fiercer and faster, as the pace picks up and travel tech sizzles once again.

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Nick Vivion

About the Writer :: Nick Vivion

Nick helps brands blog better at Ghost Works, a boutique blog management service. Nick was previously the Director of Content for tnooz, where he oversaw the editorial and commercial content as well as producing/hosting tnoozLIVE.

 

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