Booking Holdings Empire Tiptoes Toward Quiet Collaboration

The multiple companies of Booking Holdings have run entirely independently of each other for years. But it’s not clear how long the status quo may remain the case.

Since becoming CEO of the group in 2017, Glenn Fogel has spoken about his vision for the conglomerate. Until now, Booking Holdings subsidiaries have typically driven most of their revenue from the sales of a single product, such as lodging or flights, to their customers. Fogel’s vision is for its consumer-facing brands to provide multiple services, cross-sells, and upsells to customers before, during, and after their trips.

During a conference call on Thursday, when Booking Holdings executives discussed first-quarter earnings, pressure for greater collaboration across companies seemed to be a subtle theme.

Fogel summarized his vision this way: “Our overall strategy is ‘the connected trip.’ There’s much more than just going onto a site and booking a hotel. That’s what we’re trying to do is create all these different things and stitch them together in a way that provides significantly more value than any single service could do on its own.”

Last year, Skift reported on how that has led to Booking.com to chart a path toward becoming a full-service travel agency. For example, Booking, which became a global giant of hotel booking, has recently added other products, such as short-term rentals and tours and attractions, to its menu.

Until now, Booking Holdings has famously been a set of independent fiefdoms. Each major consumer brand has retained separate management. That’s not changing any time soon.

However, Fogel’s vision may also be creating a centrifugal force that will lead to greater cross-brand coordination.

Fateful Attractions

Case in point: Booking Holdings brands like Kayak and Agoda aren’t required to source their tours, activities, and attractions content from FareHarbor, a tour operator reservations and management software suite. Booking Holdings acquired FareHarbor last year and has left it as an independent company whose leadership reports to Booking Holdings.

For example, Kayak sources content for its “things to do” recommendations from Get Your Guide, while Agoda sources much of its “things to do content” from TripAdvisor-owned Viator.

Skeptics may wonder, though, how long that relaxed attitude can last. Assume for argument’s sake that TripAdvisor and its Viator brand, GetYourGuide, Klook, and Expedia Local Expert continue to invest heavily in taking market share in tours and activities. It would seem likely that all of the significant Booking Holdings brands, not just Booking.com, would feel a strategic need to work more closely with FareHarbor as a countermove.

On Thursday’s call, Fogel said, “FareHarbor has enabled us to accelerate our growth in the attractions market and has given us key capabilities to build a truly connected trip, where we envision a frictionless customer experience that we believe will enhance loyalty in our accommodations offering.”

For now, FareHarbor is Booking.com’s baby. Fogel said his vision is for the Booking.com app to show lodging bookers all of the things they might do in a city. He said that the FareHarbor integration makes it frictionless for the Booking.com app to process a transaction and provide users with a QR code as a ticket.

“It’s quicker, because we’re offering something like a skip-the-line benefit, or it’s cheaper,” said Fogel. “These are things we can do because of our overall huge demand. We can negotiate with these suppliers and get these kind of benefits for our customers that others may not be able to get.”

Yet observers may wonder if, over time, it is inevitable for Booking Holdings subsidiaries to participate in purchasing cohorts to take advantage of volume discounts for some parts of their supply chains and operations, such as for attractions and tours sourced via FareHarbor.

Fogel’s OpenTable “Frustration”

The pressure to coordinate is perhaps best illustrated by how between last June and October Kayak consolidated direct control over OpenTable, the restaurant reservations platform. Both companies belong to the larger Booking Holdings group.

On Thursday’s call, an analyst asked Fogel for an update on the integration of OpenTable, which Booking Holdings acquired in 2014 and that has not been as profitable as hoped.

“In terms of integrating for OpenTable, it is something I’m very encouraged by, and I’m often frustrated that we haven’t done it yet,” said Fogel.”I do see it coming out in future.”

“We need to provide a combined package product, something that we’re using all the data we have with our customers to provide them with a better, more effective way to give them value,” said Fogel. “And it’s not just for the customer who’s traveling. We have the customer on the restaurant side. Using our OpenTable platform is a marketing platform for those restaurateurs and be able to do that because we know who the people are, where they’re going, we know their habits.”

Fogel continued: “Another reason to make them more loyal to us, they are going to come back and be repeat customers. How fast is that going to happen? I hope faster than it has been in the past.”

Fogel’s comments prompted some industry observers to wonder if top executives from Booking Holdings units will begin to gather more regularly to share tactics and best practices around data sharing between the restaurants business and the other parts of the company.

To make full value of OpenTable, the reservation system and its data can’t remain the exclusive turf of Kayak. The price-comparison service has relatively less data on customer behaviors and patterns than online travel agencies Booking.com, Agoda, and Priceline.

Fogel cited one test Kayak is doing with OpenTable that he found particularly promising. For years, OpenTable users have been able to earn points by making reservations that they could redeem for vouchers for future meals. Recently OpenTable has been enabling customers to use the dining points to get a cheaper hotel booking made through Kayak.

“It’s small and experimental,” said Fogel. “But I like it.”

It’s unclear why Booking Holdings wouldn’t expand a loyalty program like that to, say, Booking.com or Priceline. The data that those brands collect on user engagement with the offers could also be fed back to OpenTable and Kayak to improve their products.

The SuperApp X Factor

Another factor pushing Booking Holdings units to cooperate is the conglomerate’s strategy to compete more effectively in the Asia Pacific region. Customers in that market tend to rely on so-called superapps for all their bookings, messaging, and payments. Customers in Asia also tend to be especially motivated by package deals, analysts say.

Booking Holdings has been working with superapps like Grab, a food-ordering service that has evolved into a broader e-commerce offering, as a way to reach customers. However, working with superapps is uncharted territory for the conglomerate.

Fogel said that, regarding the superapps, like Grab, he didn’t know how well Booking Holdings brands would be able to acquire direct repeat business. “I don’t know because we haven’t rolled out the product yet, and we don’t have data yet to say how easy is it to get people to come direct or not.”

Superapps that have payments components see how consumers behave and engage with third-partner partners, providing access to data insights that individual brands, like Agoda, don’t necessarily have as new entrants in emerging markets. To respond to a data deficit, Booking Holdings may feel compelled to pool together its data across brands about consumer and market behavior in Asia Pacific.

Fogel also touted similar experiments Booking.com has been doing in packaging lodging offers with ground transportation offers from its subsidiaries Rentalcars.com and RentalCars Connect — both within Booking Holdings platforms and via the superapps.

Overall, several factors appear likely to push for greater brand alignment in the Booking Holdings stable over time. If that’s the direction Fogel is driving toward, he’ll have to tread carefully. The managements of several of the subsidiaries have become accustomed to a fierce independence.