Skift Take

Booking.com's focus on hotels plus TV and online advertising, which gets more guests into those hotels, is obviously paying off.

The Priceline Group crunched 104.6 million room nights booked in the first quarter of 2015, shattering the 100 million barrier for the first time, as CEO Darren Huston dismissed the business impact of rate parity agreements reached with European countries.

Under the agreements, hotels in Europe have to give Priceline’s Booking.com rates that are at least equal to the prices on hotels’ own websites but can give lower rates to Booking.com’s online travel competitors.

Huston said he was “pleased” with the outcome of the rate parity negotiations with regulatory authorities in France, Italy and Sweden.

“We wouldn’t have proposed it otherwise,” Huston said.

The agreements announced April 21, however, extracted additional concessions from Booking.com as compared with a proposed commitment that Booking.com revealed last December.

Conceding that things can always change — and there are further discussions under way, particularly with German authorities who apparently are taking a harder line — Huston said: “I don’t see this as having any significant impact on our business.”

Incentives To Provide the Lowest Rates

Huston said rate parity permeates the travel and other industries and isn’t just about hotels. For example, if you look on Delta.com there is basic rate parity on routes compared with other carriers, and Apple enforces rate parity on its products, he said.

Hotels offering their rooms through Booking.com have incentives to provide the best rates because otherwise travelers won’t book them and their properties also won’t show up prominently on Booking.com if the rates are too high, Huston said.

The Priceline Group’s booked room nights in the first quarter of 2015 represented 25.4 percent growth, a slight acceleration compared with the fourth quarter of 2014 but a deceleration from 32 percent in the first quarter of 2014.

The 104.6 million room nights booked in the first quarter compares favorably with the previous high of 94.8 million in the third quarter of 2014.

The Priceline Group also upped its hotel and accommodations supply to 635,000 properties, up 40% over last year, and is pushing to add vacation rentals from individual owners. Huston said the company is adding new tools to make it easier for these owners to upload their properties.

Expedia’s room nights booked is growing faster than Priceline’s, but from a much smaller base.

Expedia Inc.’s room nights booked in the first quarter of 2015 increased 32 percent to 47.6 million — way less than half of the Priceline Group’s room nights booked — and Expedia’s property count reached 510,000 hotels compared with 635,000 for the Priceline Group.

Expedia’s numbers were pumped up by acquisitions, although officials argue that the bump primarily came from organic growth.

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Tags: booking.com, earnings, expedia, priceline

Photo credit: A still from Booking.com's 'Booking Epic' TV commercial. Priceline Group

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