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Priceline Group CEO Darren Huston said today during the company’ third quarter earnings call that Booking.com will begin testing this week its new partnership with TripAdvisor to participate in TripAdvisor Instant Booking.
He said Priceline Group entered the partnership because it was able to get the type of branding it needed in this Book on TripAdvisor booking process along with reasonable return on investment.
One of the issues that the two companies resolved, Huston said, was that he didn’t want Booking.com’s content in TripAdvisor Instant Booking to help other companies get bookings but wanted it primarily to help Booking.com get bookings and repeat customers.
“We would never want to be a dumb pipe to somebody else’s brand,” Huston said.
Then in a cryptic — although unstated reference to Google’s Book on Google initiative — Huston said the Priceline Group is open to participating in other such third-party booking initiatives if the branding is adequate and ROIs are reasonable.
Commenting about TripAdvisor Instant Booking, Huston said: “We will also work to make adjustments in a similar Instant Booking path we have at Kayak, and are willing to work with other media owners who adopt similar principles that allow both the media owner and the advertiser an opportunity to promote differentiation in their branded offerings and to grow their businesses.”
That was a reference to Google, which has rolled out Book on Google in the U.S., and others such as Expedia’s Trivago. The fledgling Book on Google enables consumers to book hotels on Google sites and apps. Partners can participate by paying Google commissions or bidding on clicks.
Huston said the Priceline Group is working with others beyond TripAdvisor, including Google and Expedia Inc.’s Trivago.
Priceline Group-owned Kayak was the first metasearch company to launch a booking path several years ago, Huston said, but it did not have adequate branding for partners and Booking.com was loathe to participate it.
Kayak has changed that branding and booking path in the fourth quarter, which led the way to Booking.com’s participation, he said.
Huston said the Priceline Group prefers “blue links” and “meta links” to TripAdvisor-type bookings but believes there are positives to the new partnership in providing a branded booking path for Booking.com, Agoda and Priceline.com.
On the question of ROIs through Book on TripAdvisor, Huston said he doesn’t know yet if it will be a channel to get aggressive on or not, adding that testing and optimizing Booking.com’s participation will determine the outcome.
Asked about the potential ROI from TripAdvisor Instant Booking and Book on Google, Huston said: “We are on margin ROI agnostic across various sources of demand. Of course, there are types of demand that work well for us where we will get really healthy customer repeat that we like the way that the channel’s working that we might lean-in a little bit more. And then other channels where we may be getting customers, but we don’t like the nature of the customer or they’re not repeating in the right fashion, then we’ll lean back from that. So we’re agnostic in that sense.”
“I think the TripAssist execution is one that we would like to use across other partners,” Huston said. “We will make some changes on Kayak. We have been working very closely with Google, with trivago, other players. And I don’t think it’s going to enhance our lives. I don’t think it will bleed away from our lives, and we’re going to have to watch as these things come together and we really get used to the consumer behavior, and whether or not this is a channel we will lean-in to or lean back from. But overall, we always try to earn money on every transaction regardless, and this will be a net positive from a cash flow standpoint for us, although not extremely material given kind of the size and scale of our business today.”
Huston said the Priceline Group is such a large business that he doesn’t believe its participation in TripAdvisor Instant Booking will be material to the Priceline Group’s earnings.
On the room night front in the third quarter, the Priceline Group’s room night growth slowed to 22 percent, down from 26.7 percent a year earlier.