Priceline to Focus on Existing Units After Last Five DealsMike Cohen
Priceline Group Inc., the largest U.S. online travel agent, is focused on growing existing businesses after agreeing to five new purchases in the past year, Chief Executive Officer Darren Huston said.
“Acquisitions happen once in a while,” Huston said in an interview in the South African city of Cape Town on Monday. “It’s not where I spend most of my time. It’s really how do we execute, how do we digest the things that we have brought into the group.”
Priceline, whose websites include Booking.com and KAYAK, has announced a series of deals as it battles mounting competition from Internet competitors including Google Inc. and Expedia Inc. The Norwalk, Connecticut-based company bought restaurant-reservation service OpenTable Inc. for $2.6 billion in June last year, followed by a $500 million investment in Ctrip, China’s largest travel website.
Priceline has the option to raise its ownership of Ctrip to 15 percent and is adding more shares to the 11 percent it now holds, according to Huston. The company is providing its Chinese partner with funding to help compete in the country’s highly competitive hospitality market.
“We are helping them bring their guests outbound and they are helping us with accommodation in China,” Huston said. “The Chinese just want to go out and see the world,” he said, adding that in 10 years’ time “the Chinese will be by far the most important travelers.”
Priceline’s three other acquisitions announced in the past 12 months are Rocket Travel Inc. for a proposed $20 million, and PriceMatch and Buuteeq Inc. for undisclosed amounts. KAYAK was bought for about $1.7 billion in 2013.
“In the Internet, if you stop you die,” Huston said. “You have to keep planning a higher gear every day, every week, every month. The acquisitions we do are always premium brands that we want as part of the group.”
The stock was little changed at $1,163.58 in New York at 11:11 a.m. on Tuesday, having gained 2.1 percent this year, valuing the company at $60.3 billion.
Priceline is also looking to grow its business in Africa, where it has about 14,000 properties including hotels and guest houses on its books. The company has offices in seven cities on the continent from the Egyptian capital, Cairo, to Cape Town.
“Our business in Africa is growing very, very fast,” Huston said. “The demand for Africa as a destination is very high. Our growth of properties year-on-year in Africa is like 45 percent.”
Priceline hasn’t been significantly affected by fast-growing room-sharing service Airbnb Inc., Huston said.
“They started out renting a sofa,” he said. “We are coming from hotels to B&Bs to guest houses to apartments. Somewhere at the bottom of the accommodation pyramid, we probably meet one another.”
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