The Priceline Group is the colossus of hotel bookings but it is playing catch-up when it comes to vacation rentals. Yet CEO Glenn Fogel sounds determined to hone in on Airbnb's territory.
Priceline Group chief executive Glenn Fogel says he’s eager for his company to catch up to online travel competitors in volumes for vacation homes and apartment rentals.
While Fogel didn’t name any names, it’s safe to assume that the top competitor in his mind is Airbnb, the largest online player in home and apartment rental reservations today. Airbnb has more than 3 million listings
Priceline Group executives, speaking during the company’s second quarter earnings call Tuesday, touted the growth in home-rental inventory at its largest brand, Booking.com.
During the quarter that ended June 30, Booking.com grew its inventory of instantly bookable vacation rentals to more than 721,000 properties — a 54 percent growth rate over the same period a year earlier.
This quarter was the fourth consecutive quarter of accelerating growth in inventory and more than twice the rate of growth of its hotel listings, the company stated.
Fogel said, “We believe adding vacation rental properties alongside hotels not only offers more choice for customers but also leads to conversion benefits across the entire Booking.com marketplace.”
Of all of the Group’s activities, Fogel cited growth in alternative accommodation as a top priority.
To put this in context, the home-rental market is believed to be growing significantly faster than the hotel market, albeit from a smaller base.
Airbnb isn’t Priceline’s only rival, of course. Expedia Inc., has been eager to compete, too, since its 2015 acquisition of vacation rental booking company HomeAway. The combined portfolio of brands has about 1.4 million online bookable listings.
Fogel noted that listings on Booking.com are booked like hotels are, instantly. While rivals Airbnb and HomeAway have more overall listings, many of their properties do not yet dodge the old-school back-and-forth process between the host and the guest to find mutual approval.
HomeAway is racing to get to have all of its listings instantly bookable, too.
Priceline executives wouldn’t reveal how much consumer demand there is for alternative accommodations.
But Fogel said, “Non-hotel accommodation is very important to us. Some customers come to our site and mobile app and they’re not even thinking they might want a vacation rental instead of a hotel. That’s one of the benefits of our platform — we offer both types of properties in the same search listings…. We don’t drive customers to one type of accommodation over the other.”
Continued Company Growth
Net income in the second quarter grew 24 percent to $720 million on revenues of more than $3 billion.
Executives said the company’s portfolio did well in Europe, a region that is a huge growth driver for the group.
But they did not have much to say about the recent acquisitions of travel brands Momondo and Cheapflights and the assets of Mundi, a Brazilian travel price-comparison brand.
One of the notable statistics was the somewhat decelerating pace of growth in the Priceline Group’s hotel business. While more than 170 million room nights were booked in the second quarter, that figure was up only 21 percent over the same period last year — the slowest pace of growth since before 2010.
As the company has been pointing out for years, Fogel chalked the slowing pace in room nights booked to the company’s overall growth in size. As the company expands, he said, it becomes harder to sustain the same percentage of growth on an ever-rising numerical base.
That could be behind some of the company’s motivations in home and apartment rentals. Booking.com has added to its rental listings at double-digit percentage gains quarter after quarter.
Photo credit: Booking.com wants to become the king of both online hotel and apartment rental bookings, taking on Airbnb. Booking.com