Booking.com Challenging Parent Priceline in U.S. Travel
Priceline.com Inc. (PCLN) has been a prominent U.S. brand for 15 years thanks to celebrity spokesman William Shatner. Starting today, the travel company’s biggest unit is elbowing its way into American living rooms.
Booking.com, the Amsterdam-based division of Priceline that accounts for more than two-thirds of total revenue, is airing a series of commercials to introduce its hotel-reservation service to U.S. travelers. The 15- to 60-second spots, part of a campaign called “Booking.yeah,” will air on television stations and in movie theaters.
Since acquiring Booking in 2005, Priceline’s annual revenue has quintupled and the stock has surged 29-fold, as it became the dominant accommodation site in Europe. The international business, which mostly comes from Booking, accounted for 71 percent of revenue in the third quarter, up from 43 percent three years earlier.
“We’re looking to tell the world’s best-kept travel secret to the American audience,” Paul Hennessy, Booking’s chief marketing officer, said in an interview.
While Booking has driven Priceline’s growth, the unit operates independently from its parent, with its own executive team, marketing budget and growth strategy. Pushing into the U.S. will pit Booking against Priceline in the accommodation- reservation market, which includes Expedia Inc. (EXPE), Orbitz Worldwide Inc. (OWW), Sabre Holdings Corp.’s Travelocity unit and Expedia’s Hotels.com.
“One of our secret successes is to be able to operate in an autonomous way,” Hennessy said. “The U.S. being one of the world’s largest travel markets makes it a perfect place for us to compete.”
Brian Ek, a spokesman for Priceline, said competing with Booking is no different than the dynamic between Expedia and its Hotels.com division.
“Each brand offers its own unique set of services,” Ek said. Booking is the world’s top hotel-reservation service, while Priceline is “the leading provider of discount-travel services in the U.S.,” he said.
Priceline is already contending with slowing growth in the U.S. Revenue in 2011 rose 7.3 percent, down from 10 percent the year before and 17 percent in 2009. Unlike Booking, which focuses on accommodations, Priceline competes in the less- profitable airline reservation market, as well as in rental cars and vacation packages.
The airline market is where Priceline originally made its name, letting customers name their own prices to bid on discounted tickets. To promote the service, Priceline turned to “Star Trek” actor Shatner, who has been featured in commercials since 1998.
Booking isn’t casting celebrities in its commercials, Hennessy said. With help from advertising agency Wieden & Kennedy, the company will air promotions that focus on getting past the painful elements of traveling while highlighting the joy that consumers experience when they arrive at their luxurious hotel, villa or bed & breakfast.
“It’s a war cry of enthusiasm for the satisfied and thrilled traveler when they know they’ve got it right,” Hennessy said.
Booking has quietly been staffing up in the U.S. About 1,000 of the unit’s 4,500 employees are in the country, spread among 12 cities, including New York, San Francisco and Seattle. Earlier this month, Booking Chief Executive Officer Darren Huston was given additional duties, including managing relations between Priceline’s brands and handling strategic development for global expansion.
Norwalk, Connecticut-based Priceline fell less than 1 percent to $671.27 at the close in New York. The stock has climbed 29 percent in the past year.
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