You might think Priceline (PCLN) and Expedia (EXPE) are playing a chess game with one another, but in reality Expedia is only reacting to Priceline playing an entirely different game. Priceline buying HotelNinjas and Buuteeq, show they are on a different path, a path that is about offering hotelier a bunch of solutions so they better serve their customers in addition to their web services that they offer to their customers, too.
The hotel OTA sector might be consolidating but the hotel software as a service (SaaS) industry is booming. API integrations have moved hotels foward, and past the days of GDS. Fees per booking are dwindling, and flat services with more options are becoming common. Priceline is building a suite of services that its customers can use, and is aggressively pricing and promoting those services to boost their customers performance. It’s quite brilliant I’d say.
If the hotel side of GDS is dying, an autopsy might see Siteminder as its cause of death. Sure, there are other strong channel managers out there such as RateTiger and RezGain, but Siteminder has been building strong traction and is easily on the way to becoming the world leader. Their flat fee easy to use service alreays works with all Priceline’s channels and Buuteeq. A channel manager could be the next step for Priceline and Siteminder is the first that comes to mind.
For hotels today, managing revenue is just as important as managing housekeeping. Hotels hire a revenue manager and even a team to tackle the task. A properly managed revenue strategy can boost revenues by 7%, which can easily cover the costs involved. Pricematch is the brainchild of some French geniuses. They have steadily increased traction and customers over time, and are now giving the the large revenue management systems such as IDeaS and Duetto a run for its money. Priceline, incorporating the power of PriceMatch, can be a powerful thing to help hoteliers boost their performance, and the benefits can far outweigh the cons, PriceMatch increasing the bookings of Priceline’s OTAs competitors.
Now if Priceline was to consider a revenue management system, then why not go a step further and offer OTA insight. These guys really help the hotels predict where bookings come from and when by using benchmark analytics, whereas hotel revenue management systems rely mostly on internal analytics. This can really help with the hotel’s pace and performance, which means they’re right up Priceline’s alley. Hopefully, someday OTA Insight offers its service to hostels.
Triptease creates a widget that allows the visitor to search other sites for the price of a hotel they are bout to book on the direct site. The premise is that hoteliers want them to book direct, and by removing the other steps of research, they can reduce booking abandonment and push up direct bookings. Other hotels, such as Shire Hotels in the UK, do just this, and it has proven to double the direct bookings year over year. Priceline can use this to push the direct bookings on their direct booking platform. However, I do not see Priceline buying Triptease, if anything, they will create a widget pulling from their Kayak database, which will be equally as valuable and at least keep some of the revenue within the Priceline family if the parity was off and the visitor booked elsewhere.
These are all great tools. Hopefully someday, more of them will be available to hostels.