Priceline Group Interim CEO Jeffery Boyd believes hotel chains should reconsider their efforts to withhold their lowest rates from the largest accommodations player on the planet.
“I wouldn’t express it as if they do this then we’ll do that,” Boyd said during the company’s second quarter earnings call August 4. “This is a partnership.” He characterized the chains’ activities as an “evolution” of goals they’ve had for a long time.
Still, Boyd said, “it’s a reasonable ask” for “the largest player in the space” to expect to get the chains’ most-competitive rates because that’s what Priceline’s customers’ expect. Priceline now offers more than 1 million properties, a 30 percent increase over the second quarter of 2015, and this includes some 493,000 vacation rentals and apartments, he said.
Boyd said the Group will continue to “press” the chains for their lowest rates and noted that Priceline is equipped to advertise substantial discounts, too.
“It might not be a good idea” for the chains to push those discounted rates, Boyd said.
In other words, if the hotel chains continue to offer discounted rates to their loyalty program members when booking directly on the chains’ own websites, then Priceline can do some discounting of its own as a counter-measure.
“We think it is a good idea regardless of the market cycle” or occupancy rates for the chains to participate in Priceline Group sites such as Booking.com and Priceline.com with their most-competitive rates if they want to maintain average daily rates and revenue per available room numbers, he said.
When occupancy drops or when the hotel chains are trying to put heads in beds in far-flung geographies and in diverse languages then Priceline Group sites are effective marketers for them, Boyd pointed out.
Expedia Claimed Direct-Booking Has Improved Margins
None of the analysts during the Priceline Group’s second quarter earnings call asked what impact the hotel chains’ direct-booking campaigns have had on the company’s business.