Skift Take

Military family members notice when businesses are military-friendly. This deal with the Pentagon is certainly a win for the Priceline brand, if not a gargantuan boost for its business. Plus, it seems as though the Pentagon will be responsible for a lot of the marketing.

Priceline’s new website, American Forces Travel, which it recently launched in partnership with the U.S. Department of Defense, is not a game-changer for the company, and may not even turn out to be material to parent company Booking Holdings’ financial results.

But American Forces Travel, the department’s official leisure travel site, is something Priceline very much wanted to do.

“We don’t need to make it a loss leader, but it is not something we are looking to make deep margins or benefit from,” Priceline CEO Brett Keller told CNBC last week. “This is something we are really proud to be a part of, to provide a service to the Department of Defense. And what the department brings is very large negotiating leverage as we go out and negotiate prices on their behalf from our supplier partners.”

Active members of the U.S. military, members who retired with full benefits, and their families, and certain disabled veterans, as well as Defense Department civilian employees, are eligible to use the site and take advantage of discounts of up to 60 percent on hotels in some 71,000 destinations.

Currently about 6.5 million members of the military community are eligible to use the site.

The Defense Department, which determines access to the site, plans to add veterans — defined as military personnel who retired with less than full benefits — to the eligibility roster, said Priceline spokesman Devon Nagle.

In addition to hotels, the site also offers flights, cars, packages and cruises.

The Pentagon had issued a request for proposal about the leisure travel site “to the leading online travel brands more than a year ago, and selected Priceline,” Nagle said.

Priceline was coy about the business model in play for its powering of American Forces Travel. Nagle did say that transactions on the site generate a commission to bolster quality of life programs, such as fitness centers, youth activities, and entertainment on military bases.

The Department of Defense and the various military branches are now marketing the site, which had been in beta mode from November until the official launch last week, to the military. Priceline started serious work on the site in the Spring.

Although some travel marketers might tend to overlook military travelers, they shouldn’t because it’s a big segment. SheerID, which teams with travel brands including Globus, Sandals, and Vail Resorts to make exclusive travel offers to the military and verify eligibility, estimates that there were 37 million members of the U.S. military in 2017, representing $1 trillion in buying power.

“Generally, the military has higher disposal income that the general population,” said SheerID’s Bill Schneider, vice president of product marketing.

SheerID estimated that 60 percent of military families take vacations once or twice annually. “In fact, military members spend almost three times more than the national average on vacations and related expenses,” the company said.


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Tags: priceline

Photo credit: Priceline wins a contract to provide services to the U.S. military. David B. Gleason / Flickr

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