Booking Holdings caused a bit of excitement amongst analysts in February when it broke out some numbers around its alternative accommodation business for the first time.
During its earnings release for the fourth quarter of 2018, the company said alternative accommodation accounts for more than 20% of revenue and brought in $2.8 billion in 2018.
At the time, it also said this area of the business grew faster than the company’s consolidated growth rate.
It’s little wonder then that Booking.com is seeking to boost brand awareness, especially around its “home” business.
Booking Holdings president and CEO Glenn Fogel says there’s still plenty of ramp in the core accommodation business “particularly when you break it out to home.”
Speaking at the Bank of America Merrill Lynch 2019 Consumer & Retail Technology Conference, he says the company is planning “incremental” investment in brand, particularly in the United States, where people might not immediately think of Booking.com for apartments and homes.
Fogel also mentions customer acquisition activity and “doing things a normal retailer does,” such as merchandizing and combining different parts of the business to add value for customers.
Responding to a question on how the growth in alternative accommodation might affect the business model, he highlights the often higher cost related with the homes product because of the increased communication required and how technology might help.
Fogel says the company will use an artificial intelligence-driven messaging platform and natural language processing to help lower the costs.
Subscribe to our newsletter below
Later in the discussion, in what was perhaps a nod to the recent statements from the larger hotel companies around driving direct business, he talks of the competitive advantage he feels that Booking.com has.
Fogel says two elements stand out: the ability to provide better service and value by combining things that a hotel cannot and the data it can get from customers.
“A hotel can offer you a hotel. Our belief in the long run is providing much more than just the hotel.”
He adds that the “knowledge” the company gets from customers provides it with a much broader view of people’s “likes and wants” compared to a hotel, which only has one view of the customer.
Fogel also refers back to Booking.com's strengths when asked about Airbnb’s recent acquisition of HotelTonight.
He says he was curious as to the reasons behind the acquisition but pleased HotelTonight had found “a safe harbor.”
He adds: “It’s a very, very small company, but I’m not sure it’s anything different. We knew Airbnb wanted to expand out beyond just doing home.
"We believe it is a little flattering to us because we believe the right presentation to the consumer is to show all the types of accommodations.”
Executive Interview: Expedia
Cyril Ranque, lodging partner services at Expedia Group, speaks at Phocuswright Europe 2019