8 years ago

Priceline CEO on metasearch swan song, private sales, Expedia, Asia strategy

book2You’d never say accuse Priceline President and CEO Jeffery Boyd of waxing nostalgic about metasearch because, as the head of an online travel agency, he has been a metasearch critic since its earliest days.

Still, speaking at the Goldman Sachs Technology and Internet Conference 2010 in San Francisco today, Boyd says metasearch’s best days are behind it.


“In some ways, the market has moved to another time and place around that,” says Boyd, referring to metasearch.

The Priceline exec says the OTAs’ decision to remove booking fees on airline tickets took away much of the consumer benefit in using metasearch, with its heavy reliance on air, since there now is wide pricing parity on airline tickets across channels.

Looking back on the short history of metasearch, Boyd says what happened to the sector is that one player — Kayak — “has grown very substantially” while the others haven’t.

Still, he notes that Priceline views metasearch players as advertising partners for airline tickets, although hotels are a much larger focus of Priceline’s business.

Private Sales

On other issues, Boyd says he views private sales, as practiced by Jetsetter, Kayak and Travelzoo as “niche businesses,” which will remain very small compared with the online travel agencies.

Boyd says it’s “hard to see how they will scale” when they offer limited-time sales for a limited number of properties.

He adds that hotels won’t “dedicate material amounts of inventory” to private sales and thus a consumer would have a “fractional” chance to find a San Francisco hotel deal on Jetsetter for the dates the consumer desires.

Boyd doesn’t see Priceline offering private sales and adds that the company already addresses that market through Name-Your-Own Price.

No Opaque for UK

Boyd doesn’t envision Priceline trying to resurrect a Name-Your-Own Price offering in the U.K. because mounting such an effort would be very difficult and he doesn’t want to get distracted from the company’s primary focus in Europe, building Booking.com.

Priceline tried to launch an opaque offering in the U.K. several years ago and it “wasn’t very successful” because hotel inventory in Europe is fragmented and the star-ratings systems are inconsistent, he says.

“I think it is a more difficult proposition there [Europe],” Boyd adds.

Hotel-only in Europe gives Expedia, lastminute.com an Advantage

With Priceline’s focus on hotel-only Booking.com in Europe, Expedia and lastminute.com get an advantage because they offer vacation packages, Boyd says.

That means Priceline won’t be able to attract certain travelers who prefer to shop for packages.

Still, Boyd says Priceline is not working on a vacation-package business for Europe.

Also, in the advantages-disadvantages sphere, Boyd acknowledges that Expedia has a better ability to merchandise promotions than Priceline has as Expedia got into the merchandising-promotions game earlier than Priceline did.

Dual Strategy for Asia

Boyd likes Priceline’s strategy of seeking to gain traction in Asia markets by entering the region with its two subsidiaries, Booking.com and Agoda.

Boyd says hoteliers in Asia can control their own pricing through Booking.com, which uses a retail/agency model.

Meanwhile, he says, Agoda uses the merchant model and can drive demand to the hotel from within Asia, while Booking.com can spur international demand.

Thus, Priceline has a dual strategy for the Asia hotel duel and Boyd likes that just fine.

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Dennis Schaal

About the Writer :: Dennis Schaal

Dennis Schaal was North American editor for Tnooz.



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