Phocuswright: Priceline will focus on the big opportunities to drive growth, says chief

Phocuswright: Priceline will focus on the big opportunities to drive growth, says chief

Image: Darren Huston chief executive of Priceline

Booking.com parent Priceline Group will focus on big opportunities, to help it continue to grow at the pace which has seen it become the world’s largest OTA group.

Darren Huston, chief executive of Booking.com, was asked about the negative sentiment surrounding Priceline’s third quarter earnings update.

He admitted there were headwinds, particularly the weakness of currencies against the US Dollar, but that Booking.com continues to grow and now accounts for £50bn of transactions annually.

“We have grown more this year in absolute terms than any other year in the company’s history. I’m not ashamed of 29% growth,” Huston said.

However, he added: “To keep growth rates up gets tougher and tougher. As an organisation are we working fast enough? Are we humble enough with our partners.

“We are selling services other people provide and at our scale we have to keep finding a higher and higher gear. The challenge gets bigger and bigger, but we are up to it.”

Huston described the business as “super-healthy” and said “we continue to grow at double digit rates and we are taking more share everywhere we compete.”

The group will do almost 100 million room nights globally in the third quarter of this year, although Huston said it was still a “small fish” in a global industry worth $1.3 trillion.

“We cannot do small things. We have to be working on really big things to continue on that path. I believe with the scale and competitiveness we have we will get there.

“We have a great pipeline of innovation. We’re all about how we take friction out of these local markets. It’s not a lack of opportunity, it’s more what is it we are not going to focus on.”

Mega-acquisitions like Kayak in 2012 and restaurant booking platform Open Table this year and its growing car rental division were “increasing the addressable” market for the group, said Huston.

Asked about the prospect of further acquisitions he pointed to the purchase of hospitality software specialists Buuteeq and Hotel Ninjas as the sort of area it may target.

But he said: “In terms of adding seats at the table of Priceline Group, there are only so many seats. The things we add a seat on really need to be a certain size to make a difference.”

Huston said a big opportunity for Booking.com was to further establish itself as the site people use for domestic travel in planet’s biggest economies like China and Germany.

Mobile is key to this, due to the way it is opening up the opportunity for Booking.com to promote recommendations and the products its customers need when they are on their trip.

Huston said the firm’s pre-trip emails offering insider guides of the destinations they are visiting have been shown to drive up brand loyalty.

And he said it was still early days in terms of what else it could to do to enhance the in-destination experience, like being able to offer attractions tickets or restaurant reservations.

Huston said the mobile business is booming with booking values up to $8 billion last year, and a “much, much bigger number” this year, compared to just £2 billion two years ago.

“Mobile is critical as a new platform to drive transaction, but more importantly it’s offered everyone a computer in their pocket.

“People now book the first thing they need in a destination and then wander round with a phone. Mobile’s transforming the ability to create really cool end-to-end experience for our customers.”

But he said the main opportunity for growth was in the “organic execution” of its core business of getting the long tail of smaller hotels and properties people want to book easily accessible.

Huston said compared to his previous employers at Starbucks and Microsoft, Booking.com was a good mix of being consumer and data centric.“You have to have a feeling for the customer. But it’s not enough to be just customer orientated. For me this is my dream job.

“There isn’t a semi-colon that goes on the site without A-B experiment. No one assumes they are smart enough to really know what the consumer wants. They always test it with data.”

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