Sounding Off: The smart money goes on connecting the dots

Klaus Kohlmayr, IDEAS

"Booking [Holdings] is clearly using this time to fill out some of their gaps."

Quote from Klaus Kohlmayr, chief evangelist and development officer at IDEAS, in an article on PhocusWire this week about the recent $3.5 billion spending spree by Booking Holdings.

Each Friday, PhocusWire dissects and debates an industry trend or new development covered by PhocusWire that week.

The acquisition by Booking Holdings in recent weeks of Getaroom followed by ETraveli raised some eyebrows.

The price tags on the purchases was one reason but also the swooping on targets at a time of such uncertainty, undoubtedly will have caused a fair degree of head-scratching.

But clearly for Booking Holdings and its CEO, Glenn Fogel, such an opportunity was too good to miss. What is it they say about opportunities in a crisis?

Booking Holdings is clearly filling in some of the gaps in its journey to a connected trip - something that Fogel has touted for many years now.

At a recent UBS Global virtual conference, he described it as the company’s “magic” that it will continue to build and invest in, with Fogel adding: "I’m not pulling back on that.”

Flight inventory is an obvious one and Booking.com’s existing partnership with Etraveli, announced two years ago, will have had the time to bear some data as to its effectiveness.

The Getaroom acquisition, meanwhile, gives the group a presence in the B2B hotel distribution market, a space it clearly sees it can add value to.

And, as some of our pundits point out in their analysis as to what’s behind Booking’s spending spree, there is very likely more M&A on the cards.

Tours and activities is one area that the group has been making up ground, with its partnerships between Booking.com with TUI and Viator.

The bigger question is whether Booking would acquire something else in tours and activities after purchasing FareHarbor in early 2018.

Over the years many have suggested it could buy Tripadvisor filling some gaps at the top of the purchase funnel as well as all the good contract stuff with tours and activities providers via Viator.

The short answer is no one knows - but when you follow Fogel’s train of thought, not only on the opportunity to keep customers in the Booking Holdings ecosystem for all of their travel requirements, including payment, but also of the opportunity to get them to spend more, it slots into place.

At the UBS event, Fogel described it as his fantasy saying it’s not going to happen but perhaps the reality won’t be too far off.