Alibaba IPO and OpenTable Acquisition Highlight Relationship of Travel and Local

Chinese commerce platform Alibaba, which is in the process of executing one of the largest IPOs in history, has a local services business that combines travel, restaurants and movie tickets.

Alibaba’s Taobao Local Service platform includes Tabao Travel, which offers flights, hotels, and visa services, and enables travel agents and airlines to list their deals.

In addition, Taobao Diandian, which also is part of the Alibaba’s local platform, is a mobile app that enables diners to pre-order meals for takeout.

And, Taobao Movie lets movie lovers select seats and purchase movie tickets online.

As mobile takes off and the global travel industry begins to blend the traditional travel category with restaurant services and tours and activities, there are some who argue that the Priceline Group’s acquisition of restaurant reservations platform OpenTable “has little to do with travel at all,” and is simply a distinct new market and opportunity for Priceline.

Alibaba doesn’t see it this way and views these types of travel services through a “local” prism to be used by locals and travelers alike.

And, Priceline Group CEO Darren Huston sees a blending of travel, including hotels, and dining services, as well.

In a conference call June 13 to discuss the OpenTable acquisition, Huston stated: “And finally and critically, it’s important to understand that it’s the same customer. Travelers are diners. And in fact, they’re some of the most valuable diners because they’re transient diners.”

“And we believe that there’s opportunity to cross-promote OpenTable and the rest of the group’s brand to the same customer base,” Huston said. “And, that’s an area that we’ve done some things in and we think we’re pretty strong at demand generation, and we think this is another important leg of the stool for the Priceline Group.”

Huston said account managers from the Priceline Group’s Booking and Agoda units may be able to give OpenTable sales staff introductions to local restaurants since dining establishments are often located in hotels.

One can also envision a day when Booking.com begins to target business travelers and the restaurant reservations services it might be able to offer road warriors who’ve already booked a hotel.

Over the years we’ve seen the blending of business and leisure travel. An emergent trend in 2014 is a further blending of air, car and hotel with local and restaurant services, such as Taobao Diandian’s takeout platform and OpenTable’s reservations and payments technology.

Rigid thinking and travel categories are giving way to the mashup of travel and local within the hotel industry and beyond it.