Priceline Group now has over 500 employees based in China, 10 offices across the country with another two planned to open towards the end of the year.
NB This is a guest article by Ritesh Gupta, a reporter for China Travel News.
Almost a decade ago I interviewed Priceline Group’s Glenn Fogel - now its head of worldwide strategy and planning - about its entrance into the Chinese market.
Fogel told me at the time:
“While early participation is usually helpful for success, our track record in Europe, where we were not an early entrant, shows that one can be a late entrant and still be very successful.”
The group took its time, but it has been steadily ramping up its presence in China.
Strong credentials
The Priceline Group stands out for its strategic evaluation, financial analysis and capital allocation when it comes to international expansion.
In China, it is thinking about building on its global assets
“One of our group’s strongest assets is its truly global reach,” says Adrian Currie, senior vice president for corporate development at Priceline Group.
The approach that ensures the group's brands perform in any market, Currie says, is about the back-end infrastructure and the front-end user experience. The former helps to accommodate multiple languages while the latter means customer service teams are fluent in the languages where services are being offered.
“This (all) is key to ensuring we can facilitate international travel well,” says Currie. "The DNA of Booking.com is extremely international...Our hotel partners have had success with Booking.com because we can help a small guesthouse in the countryside in Tuscany in Italy market itself to a family in Shanghai looking to take a rural European vacation.”
One-stop shop?
Bearing in mind Priceline Group’s presence in different verticals (serving air tickets, accommodation, car rental, meta search, restaurant booking, etc.), how is Priceline looking to serve Chinese customers in a multi-channel, multi-device environment?
Currie says even though all brands are building themselves for a multi-channel, multi-device world, in general, “we focus each of our brands on being the best 'specialist store' in its category rather than building diverse 'department store' type businesses”.
"When and where it makes sense to integrate our brands, we will seize an opportunity for smart collaboration. It may one day make sense to add restaurant reservations or flights to Booking.com and these are things we’re exploring. However, we won’t integrate for the sake of integration – only when and where we believe it truly adds incremental value to the customer experience.”
Understanding local nuance
Succeeding in China requires a tailored product in a true sense, rather than just translating a site.
As Ian Brown, CEO of Priceline's Rentalcars.com, told us, his team has already made progress. “A key part of our mission at Rentalcars.com is to create complete transparency for our customers on the product they are buying and what is and isn’t included. That isn’t always the case as you look at some other sales channels in China.”
Act global, think local
Localization isn’t new; many travel intermediaries have attempted the same before. So what’s different in Priceline's approach?
One thing that makes the group, and Booking.com in particular, unique, is that the business grew up globally. As Currie says, the site's architecture was built to be able to turn on new languages, add localized features, promote relevant content and provide a targeted user experience.
“All our group’s international customer service teams from Seattle to Amsterdam to Bangkok were built on the premise that every employee must speak at least two languages so that we can be highly relevant to the people and markets where we operate.”
He added that another critical aspect is daily monitoring of the group’s websites and improvising on products to ensure customers gain access to what they are looking for.
Building presence in China
Online travel isn’t just about key cities, as penetration is going regional in China.
In this context, Priceline can also count on its partnership with Ctrip. “Last year we announced a major investment in and partnership with Ctrip, whereby we are their exclusive OTA provider of outbound hotels. This gives us increased exposure to the Chinese traveller, and allows us to work alongside a partner that has tremendous local experience in the market,” acknowledged Currie.
“Our teams (the Priceline Group and Ctrip.com) have worked together since 2012 when we initiated our commercial partnership for outbound Chinese travellers and this relationship has developed further since then by us twice making a strategic, financial investment in Ctrip as well as expanding our commercial relationship in product and geographic terms,” said Currie, who added that this “partnership continues to evolve”.
Also, Priceline is growing its Agoda, Booking.com, KAYAK and Rentalcars.com brands and increasing its investment, staffing and partnerships in China.
“At Booking.com, after five years in the market, we now have more than 16,000 hotel partners with new hotel partners are being added every day in more and more cities to meet the needs of our increasing China customer base,” shared Currie. The group has 10 offices across the country with another two planned to open towards the end of the year. Also, today there are over 500 employees in China including a recent customer service center investment for Booking.com in Shanghai with a team of 250 agents.
Meeting expectations of hotels
There is a clear opportunity for international hotel chains to bank on Booking.com’s expertise in China.
For instance, China Travel News spoke to a senior distribution executive of a global hotel chain based in the US who told us that OTAs are proving to be valuable partners by making its properties available to travellers in China where his brand has a relatively low awareness.
Currie suggests that hotels should not deviate from their day-to-day business operations in order to think about having to build international websites in dozens of languages and how to optimize those websites for conversion and positive consumer experience.
And booking.com can help hotels with their direct business as well.
“Last year we launched a B2B service called BookingSuite, which focuses on delivering simple and scalable services to hotels directly. We are building 1,000s of websites and mobile solutions for hotels and enhancing revenue management capabilities through smart cloud-based software, as well as providing them with local market data and analytics to help them optimize their business.”
This May the group acquired PriceMatch, a cloud-based data and analytics solution specialist, and the company was integrated into BookingSuite, a division of Booking.com.
“We are often in the news for our acquisitions and investments, but those have added incremental growth to a very healthy organically-growing business. That said, we will continue to be active in looking at additional acquisitions such as OpenTable, minority shareholdings such as Ctrip and venture investments such as Rocketmiles in complementary business areas.”
The future
“Global travel, and specifically Chinese travel, are huge markets with plenty of room for a number of players to successfully service millions of travelers and grow their market share substantially over the coming years. We partner with Ctrip as they have a large, growing and loyal customer base that can benefit from our global leadership in accommodations whilst we are both active in finding new customers to introduce to our services,” says Currie.
Similarly, within the Priceline Group, the group operates independently managed brands such as Agoda, Booking.com and Priceline.com. “Each has ambitious growth plans for their hotel business too and who work together where smart collaboration can benefit both businesses,” he says.
Currie is confident that Priceline Group can delivering a tailored and differentiated product for China, and across all segments - Chinese consumers traveling internationally or domestically, and for inbound travelers to China.
NB This is a guest article by Ritesh Gupta, a reporter for China Travel News. It is republished with permission. Click here to read the original version.
NB2 Image by Shutterstock