Booking.com no longer wants to control the pricing strategies of small to medium hotels but why?
Booking Holdings, formerly the Priceline Group, is not alone looking to expand its net into rental cars, flights, dining, tours and activities and more. Speaking about the company’s latest Fareharbor acquisition, Todd Henrich, SVP Corporate Development, confirmed that the aim is “to create a hub where customers can come to get everything they need”.
Along with Expedia and Ctrip, Booking.com is one of three global heavyweights to dominate the hotel booking landscape. So, the shift in name from Priceline to Booking is, perhaps, a sign of the firm’s strategic direction – to focus sharply on controlling the booking across all travel verticals, rather than being diverted by helping hotels to price their rooms better.
This could also explain the firm’s decision to axe Rate Manager, one of the core products of BookingSuite, a set of revenue management and PMS tools which Priceline launched in 2015 to help hotels manage rates.
As a bit of background, when it launched in 2015, BookingSuite was viewed as a clever ploy to capture more revenue from small independent and boutique hotels. The idea was that the new division would build a hotel website free of charge, and cream off a 10% commission for any direct booking made through the new site. Then it seemed like a win-win situation. For hotels without deep pockets, it was better than having to fork out anything from 15-25% in the commissions being charged for reservations made through the OTAs. Booking.com, on the other hand, faced with its biggest clients, the gorilla chains, going all out in the direct booking war, saw an opportunity to grow its business.
It wasn’t the only one to spot a hotel tech opportunity. In late 2016, Expedia launched Rev+, its own revenue management solution for hotels. At the time, Cyril Ranque, President of Lodging Partner Services at Expedia Group, told EyeforTravel that there was a shift in thinking “from being a pure distribution platform to a being partner and enabler for the travel consumer and the entire travel industry”.
