We just had discussions around if that would be worthwhile and if there were any synergies. They also stated that hospitality is the ONLY travel sector in which OTAs are gaining share at the expense of independent hotel brands. To me, it sounded very logical that hotels themselves should know the best room rate they can charge at any time. This was at a very big travel conference [World Travel Market] in London in the Fall. Amazingly, three or four years later, we tried to switch them off and we found there were 25 or so hotels that were still using it. eBay spun out Paypal in 2015, which in turn, seeking to repeat the magic, acquired Millennial favorite Venmo the following year. Source: Jeremy Schaal, Jarislowsky Fraser with input from Skift Research. We had the idea that the hotel was misusing this thing so then we just selected some guests and we asked them how their stay was and if they said, "We had a great stay," and the hotel said it was cancelled, then we knew something was wrong. It was a real atmosphere of come on in, give us your ideas, we're going to do this together, let's go for it. And, yes, we did start with the agency model. Paris , 176 Hotels … But, it was the director's decision [at IAC/Expedia]. The person I met with was Shane Whaley, and we were trying to do a commercial deal with GTA/Octopus. Absolutely. The folks at Bookings.nl were focusing on chain websites. I was pretty successful in that. Our view of them was that they were very, very good in geographical places where we weren't successful. I have no issues. My ultimate goal for Bookings was to be number one if people were looking for hotels in Amsterdam because that was most of the business in the beginning. It was the early leaders within the team, including myself, Gillian, a guy called Kamal Bounajma, whom I still do business with today, and Pepijn Rijvers [currently Booking.com CMO], and we were sent five weekends to do almost like an MBA training together. We had that tech DNA and had always been very scrappy and very low-funded. I've got a meeting now Thursday. I think one of the insights we came up with, and it turned out to be the right one, was to make sure that we gave an extraordinary amount of control and independence to the guys running the business. Increase Revenues Thanks to Upselling. Use the hotel finder to search for the cheapest hotel deal for all major destinations around the world. Not just the big chain hotels, the Accors, Marriotts, and the Hiltons in London, but ultimately to find demand for and service hotels all over the country, small towns, small hotels. In 1996 in the Netherlands, Geert-Jan Bruinsma, a recent college grad who always knew he wanted to start a business, discovered the Internet, and decided he wanted to create a hotel-booking website. Essentially, we already had the infrastructure before we acquired Bookings.nl to have hundreds and hundreds of these destination sites. The conversations went on for some time, until ultimately, coming together with the transaction in which we were able to acquire control of Active Hotels while leaving management with a minority stake in the company. The tricky thing to make that work — and part of it's a bit obvious — we were growing hundreds of percent. An Oral History of Travel's Greatest Acquisition, Booking.com, builds on two previous Skift oral histories: The Definitive Oral History of Online Travel, and Complete Oral History of Boutique Hotels. And slowly, slowly, as Andy and the guys started to step back, and Kees Koolen and Arthur Kosten took over, the emphasis, and rightly so, went onto Booking.com and to create one brand. The first known online booking tool was created at the beginning of the 90s, by SABRE and CIS technology provider. At the end, it was a board decision, and the [IAC] board decided not to do it. These sites send the hotels' information and rates downstream to literally thousands of online travel sites, most of which act as travel agents. Prior to the Internet, travellers could write, telephone the hotel directly, or use a travel agent to make a reservation. I was working for a hotel chain [Golden Tulip Worldwide] and that's how I got connected with Geert-Jan Bruinsma; he was the founder of Bookings.nl. I think that was an advantage for us. Clearly we had more money. So I ended up conducting the meeting with them. For example, we were recruiting hotels in the same way, and on-boarding hotels in very similar ways. Locked up in a room, they were so full of ideas. Shane then left GTA and he went over to Active Hotels. They were doing more packaging. She's just a tough lady. The whole European team experimented and innovated quite a lot. And, I didn't really know what Priceline was at that time, to be honest. Also called free or organic search. It has, one, provided an easier way for people to get their holidays at a cheaper price with less hassle, more efficiently than in the past. Incidentally, there isn't anyone at IAC or Expedia — Barry Diller, anyone? Everything. USA Networks/IAC, senior vice president of strategic planning, CFO, Expedia, CEO [2005-2017], Priceline.com/Priceline Group, head of strategy and vice president corporate development, 2000-2016, Priceline Group/Booking Holdings, CEO, 2017-present, Active Hotels, European business development manager, 2003-2005, Booking.com, regional manager roles, 2006-2013, Bookingsportal, co-founder [2001-2003], Bookings.nl/Booking.com, chief marketing officer, 2004-2012, Priceline Group, CEO, 2000-2013, Priceline Group/Booking Holdings, chairman, 2012-present, Activebooking marketing materials. If you've got a universe where clients can pay up-front or not pay up-front for effectively the same booking, it's almost a two to one difference. He says, "I don't speak Italian." By then we were number one in England, and going for much more. [The Exceltur-EyeForTravel conference took place in Palma de Mallorca October 16-17, 2003.] At the end of 1998 there were the two of us. They were still in that very small house out in — I'd call it — the suburbs of Cambridge. They had an online company called Octopustravel. I think my job title after the acquisition was CEO of Priceline International, which sounds very grand but that was basically Priceline's non-U.S. activities, which weren't that substantial at the time. There were also people getting hired who really had a vision to where this company could go. A model for how online travel agencies collect revenue from hotels where the online travel agency is the merchant of record, collects a payment from the consumer at the time of the booking, and pays the hotel after the guest stay. It was just a very small building that had two floors, one toilet. I said, "OK, let's read a bit of this stuff to really understand what is known about consumer behavior, about signals that help customers make a decision, what are reasons why people keep delaying decisions.". What stood out were the teams' intelligence and street smarts. So yeah, we went with some of the big airlines. I came very close to saying that. Glenn was head of M&A [mergers and acquisitions] at that point in time. So Andy and I meet with Stef and Jan. Stef tells me the story of how they're doing what they're doing. You'd stick it on the individual hotel's website and for every booking he got through our booking button — because again, it was very early days and these guys didn't have these tools — we'd get a 3 percent kickback. We made it a huge virtue of not having to pay up-front because nearly all of our competitors, such as Expedia and Hotels.com, required an up-front payment. Basically, we said, OK, either these guys are nuts or we are nuts, but let's work with our customers and make the thing grow. That top-down versus slightly more bottom-up was, I think, more to do with management style than to do with national characteristics. Then at some point, I decided to buy a pile of books on persuasion, seduction, and dating to understand consumer psychology. That wasn't like that here, this was a very clear, to my mind at least anyway. READ MORE. On one side, it's exciting, we're growing, everything's going really fast. They can't book online. He actually was notionally responsible for the affiliates outside the UK. We were looking for a retail hotel product [in Europe]. We started talking and I went to visit him and the people running Active Hotels up in Cambridge, UK. We weren't interested in floating the company. Only Need 5 Minutes to Book Bus Tickets Online Online bus ticket booking is so much easier than what you think. Bookings had a particular view of Active that we were very successful in the affiliate space, but not very good in marketing. There was some discussion about whether this opportunity made the most sense or not. We powered bookings for their hotels for a long time. We had one marketing manager, who was a woman. At the time it was [Active Hotels co-founder and CEO] Andy Phillipps; Adrian Critchlow, who was his cousin and co-founder; and Matt Witt [chief operating officer] were already there, I believe. That was handled 50-50 by myself and Adrian Currie. It was a pretty small team. Since they'd rebuilt all that, they had a new modular system, which they could expand and scale very, very quickly. When I started, we were only active in the Netherlands. And probably, crucially, we trusted him. The benefits of having these fantastic entrepreneurs continuing to work in the business for six, seven, or eight years can make the acquisition, and continuing letting them really punch away at it, that's the value of the businesses. Glenn's a hugely personable, well-connected and great guy, and he was very, very-well-connected to the European tech scene. OK, that's not a big deal. It was November [2004]. I honestly think it was a 50-50 partnership. What follows is the oral history of the greatest acquisition — actually a pair of acquisitions — in online travel history. Suddenly, these guys with banker backgrounds and very experienced M&A guys come along and we were a little bit scared. I was purely tasked with signing up partners. The hotel is the merchant of record. It was that time of the year. It gave me some inspiration and at least I knew how the reservation process went because we had people who came in at night who hadn't booked so they came in for a reservation. I even got in trouble with my wife who came in at the moment. Likewise, Facebook played the Millennial card in its 2012 acquisition of Instagram, which ranked a very close second on our list of greatest Internet acquisitions to eBay-Paypal, at $99 billion in value creation. Online hotel reservations are a popular method for booking hotel rooms. We had two or three trips to the States during the summer of 2004. It's different, but it's not a ground-shaking change the way Google or Facebook was. So that was my pitch to Glenn. Here’s a timeline of key events in the history of online travel: 1989: British computer scientist, Tim Berners-Lee wrote a proposal for a system that would become the worldwide web. And just hand it off. In their family, that's the first time someone in their family is working in an office. If you imagine, there are lots of people looking at that place so, probably, I'll go there. How to get two technical platforms to integrate; who does what in terms of teams etc. In 2016, the ACCC found that Expedia and Booking.com (as well as their subsidiary sites) were forcing accommodation partners to provide them with the cheapest rates, via parity clauses. I got a phone call that they refused my advertisement because they talked about it, and they decided not to accept any advertisements with an Internet address and there had to be a phone number. And again, that was kind of abandoned, and reintroduced many years later. Would you order something that nobody has? The fact it was so multicultural, the fact that everybody just rolled their sleeves up and ran with it. I don't want to say we were complacent, but we had quite a good track record and success on that. For a third-party booking (booking through online travel agents such as Agoda, Booking.com, Expedia or etc. Yahoo was not a search engine yet; it was still an index. He was on one of those trips to the UK, and then he met with the director of sales and the GTA owner, David Babai. That, to me, would be something that is ground-shaking. I think in the academy and in other ways, she stood out [in a good way]. The inside story of twin deals that created an online hotel-booking juggernaut. I was managing basically more on the commercial side of the business, on-boarding hotels, and creating commissions at that time because we couldn't afford to continue what we were doing. I would just add it's something that people should not take for granted. Booking.com was also one of the first online travel players to recognize that all types of accommodations, whether they be hotels or vacation rentals, would be relevant to travelers, depending on the situation, and it made comprehensiveness, including listings for hotels, vacation rentals, hostels, and apartments, a rallying cry. Certainly Booking was very big in the early part of doing data testing, A/B testing, but you know, so that's what everybody is doing. You couldn't say "boo" to a goose. We kept the opaque hotel product going because that was a good product. It's business knowledge, management skills. Let's take a small walk." That's a disrupter. He's got very high integrity as an individual and we thought we could benefit from working with Priceline. Maybe we should do a deal with you at Active." One of the things that Bob Mylod [Priceline CFO] insisted on was, "OK, Andy do you think this is a really good transaction? Obviously, that was the not truth. Over 100 Hotel Booking Sites. The purpose was to measure the effects of recent changes to the parity clauses used by online travel agents ('OTAs') in their contracts with hotels. There are just so many things. Please contact their customer support team to process a booking cancellation before the arrival date. I would say the number of hotels that we had with PCs and their own Internet actually went from 20 percent to more than 60 percent, then to 80 percent once we had things settled about which ones we were connected to. I know probably 25 or 30 of these were reasonably credible, were getting a lot of PR, a lot of press. I went over to Cambridge [where Active Hotels was founded and located]. So, he was great at bringing clarity and vision to the entity. Then I decided to join. But Booking was growing faster. It was Bookings.org when the transaction was actually done. In the UK, we tried a merchant model probably in 2002. They were amazing. It had its own browsers, which meant we had to come up with our own displayed solution for presenting things on it. One of the first things I did when I joined Priceline.com was to help work on the creation of Priceline Europe, which was the joint venture with General Atlantic Partners, the big private equity firm that helped fund that operation. It was run by their tech team, and a guy called Ron Rose. But, in general, it was pretty cooperative here, and the teams worked well together pretty early on. The reaction, I'll tell you. I had joined Active in 2000 to help develop France and Spain. We agreed to stay in touch with Expedia. The guys at Booking.com understood how to address the entire market. We had landing pages before the term landing page existed. The offer Priceline made for Active Hotels was a good one. I'm trying to think. It was a weird deal because every week we were beating the plan so much that we were afraid to tell Glenn because we thought that he wouldn't believe us and think we were manipulating things. I saw how complicated it was to bring customers to properties. So they didn't understand you actually need availability and the hotel to put those rooms online to be able to sell them. Active Hotels was very successful in the UK, which was the biggest online travel market in Europe at the time, but not very successful in continental Europe. But, there are so many people to name. When you have a success, to recognize that it was due to many people and there is no sense that any single person deserves all the credit. This property was one of the first to go online with Active Hotels. Have you seen all their staff? We decided not to go down that road [to sell ourselves to Expedia], but it opened our eyes to what might be possible. So literally, it became my last travel conference ever. Well, I was in Trafalgar Square with Andy Phillipps, the CEO [of Active Hotels]. Lastminute was obviously there. From the beginning, it was the hotel that decided what the rate should be on the website. Stay safe at Sanitised budget hotels in over 230 cities, each available with standardized AC Rooms, Breakfast, LED TV, Wi-Fi, and Hygienic Washrooms. Courtesy Wayback Machine. So essentially Priceline came by. We were really lucky to have tremendous entrepreneurs at both businesses [Active and Booking]. We hardly were aware of the difference between the agency and the merchant model. Priceline's Active-Bookings acquisitions transformed a travel brand that was running out of capital resources and international expansion options for its Name Your Own Price business. We were lucky in the United States. Some of the mapping sites in Europe were probably the biggest travel sites by volume, by some distance. It was obvious to me — sorry if that sounds arrogant — but yeah, because I had seen Bookings as a competitor and I was worried about them in the hotel space. So the partner would have to send in what they wanted changed, and we had to wait in line for our team in Amsterdam to change it. Where essentially at some moment Glenn is just going to think we're cheating him because the numbers got better and better than expected every single week. This changed within 12 months. After two years, the business was going so well that I could hire someone. They effectively were charging 20, 25, sometimes even 30 percent commission, and we were at 15. With Europe's leading hotel booking portal HRS you are guaranteed to find what you are looking for. The decisions could arguably go down as the greatest missed opportunity in online travel history. An increasing number of hotels are building their own websites to allow them to market their hotels directly to consumers. Andy Phillipps said he didn't want customer service. So when it comes to booking the perfect hotel, vacation rental, resort, apartment, guest house, or tree house, we’ve got you covered. Bangkok, 593 Hotels Visit the city of Angels. I think the day after, when I had to come up with new ideas, I started looking at search engines and what we call now search engine optimization. Malaysia’s ultimate holiday destination standing at 6,000 feet above sea level. Whether they'd mean to find us or not, they'd go in because they'd seen an ad for Expedia at the time. All these sorts of things. Most of our shareholders were saying, "If you're growing that fast, even if the deal takes three to six months to execute, you've halved the value of your income while you do it because you will take your eye off the ball while you're trying to get the transaction to go through." [Booking Holdings stock closed June 29, 2018 at $2,027.09 per share.]. One advantage of booking with the hotel directly is the use of the hotel's full cancellation policy as well as not needing a deposit in most situations. Other key officials either couldn't be reached or declined to participate. But on the other hand, the guys in Cambridge still felt a little bit frustrated. You'll go to a restaurant where there are lots of people. However, the hotel contract got flung in a drawer and nobody knew if that hotel actually put rooms on the Internet or not. We started speaking with the co-founders and key executives at Active Hotels, Booking.com, Booking Holdings, and Expedia in 2016, continued in 2017, and it all culminates here. I certainly felt that I could work with the people, but we might have to break everything up and start again with the technology. The online travel agency doesn't collect money up-front; guests pay the hotel when they stay. We have customers who love it. I know two of those guys from the Amsterdam Hotel Guide. He ended up very senior in Priceline. It was a customer base and a website, and had some connections and contracts with the airlines. And so we actually felt it was an advantage. They're all gone. Mobile. But even before that, to do retail air, we had bought another company called Lowestfare, which we bought from Carl Icahn. Geert-Jan really had to learn everything from scratch. Kees [Koolen, Bookings.nl COO] and I said, "Let's take a break. There was some stuff they couldn't leave us alone on, but I think Glenn worked really well with Jeff and Bob to try and give us space to be allowed to carry on. So a lot of the guys — and some of these guys are still there — felt a little bit torn about the whole thing. We'll fill up the entire thing with a list of 300 people who just so happen to be the 150 from Active Hotels and 150 from Booking. "Choosing a Reservation Representation Company", https://en.wikipedia.org/w/index.php?title=Online_hotel_reservations&oldid=996316395, Articles needing additional references from January 2013, All articles needing additional references, Creative Commons Attribution-ShareAlike License, This page was last edited on 25 December 2020, at 21:15. In my final year in university, I got in contact with the Internet and found it really interesting. So we weren't looking at all for a retail air product at the time. And within the Cambridge office, I still had a customer service team, I had the pay-per-click team, I had a technical team, and I had the finance team. Then put your money where your mouth is." And how much do you pay, how do we get your information? They accepted 10 of us and they did an internal academy. I said, "Amy, I'm not coming home tomorrow. That's still a hallmark at Priceline, too. So we set up a business where we would work together. Booking.com reshaped the competitive landscape in travel as its parent company, the Priceline Group, now appropriately named Booking Holdings, transitioned from second-tier player to outright leader. [Priceline.com CEO] Jeff Boyd was speaking there. We realized that the distribution deal with WorldRes wasn't going to drive enough bookings. We'd never heard about dynamic packaging. So they kind of had retreated. READ MORE. At the time when I interviewed with Kees, I thought OK. One of the methods online travel agencies use to collect revenue from hotels. And I actually left Octopustravel shortly afterwards. I met the CEO, Stef Noorden. My first job was to make sure that we earned some money so that we could start expanding. And yet if we were in a deal against anyone else, we were 95 percent certain to win it. But I believed in what Active was trying to do. So we set up a business where we would work together. If somebody's thinking of setting up to compete with you, there's just no level of trust. It's just they were doing it so well in every area. From my side, it was about how can we get Priceline to take our hotel stock. I was very close to telling Andy, "Gee, sounds interesting, but I'm tired. We had businesses that were intended to build the Name Your Own Price brand around the world. I thought, wow, this would be a great thing to put these guys [Active Hotels and Bookings] together. I can't say that's an amazing, ground-moving thing there. The terminology changed a bit over the period. Is it that different than picking up a phone? They can then receive commission payments from the hotels for any business booked on their websites. He said, "Who are the other guys that we should be looking at globally?" In the grand scheme of things, the integration went remarkably well, although it was at times a tough marriage between Active and Bookings. I remember meeting Bookings' Arthur Kosten, Stef Noorden, and Kees Koolen at a conference. Every time they did TV ads, we would see a surge in traffic on our website. Normally it's much easier to get together a framework and to work together if there's trust involved. It features an intimate street-level terrace and a restaurant with original vaulted ceilings. We take a walk and we're a little bit ... we didn't expect it. I mean, the Dutch and the British working together … Yeah. The elegant History Hotel is located right by Istanbul’s city hall and 1,000 feet from Saraçhane Park. Now the focus became to integrate the two companies, which at that time had 18,000 properties combined, the largest inventory among online players in Europe. I think there was a feeling that it was going to be very hard to get the two models to work together. But then he'll say something that is so blindingly perceptive and summarizes all the previous conversations so well. Google-YouTube in 2006 ranked third at $95 billion in value creation while Google-Android in 2005 came in fourth at $90 billion, just edging out Priceline-Booking.com. He was never explicit about why, but we were good friends so I kind of understood it. There are a lot of psychological signals that come from the behavior of other people that actual help you in your purchase process. I sent an email to both owners and I proposed to them, "Let's say, if I put my hotels behind your website and we split commission 50/50. The name and URL were changed to Booking.com and Stef Noorden was appointed as its CEO. OK? I moved across to Active Hotels and moved up to Cambridge. The hotel sector has grown YoY over the past decade but how will it fare in the wake of COVID-19? A lot of these famous people that we knew of. We took it over, 100 percent. The smaller regional hotels and B&Bs didn't want to work on net rate, but they were happy to work with us on the commission model. As CEO and Founder of Xotels, Patrick Landman has made it his mission to turn independent hotels and resorts into local market leaders. I recognized early on it was a kind of mixture of tie-ticking and actual pre-due diligence. The morning after, I searched for online hotel reservations. Trust is massively underrated, and so I'm going to sound like some old fart here, but business works when people are working together. In the first phase, we were just building the model, the product, and the culture. First thing, Active Hotels was a no-name so we didn't want to go after hotel chains. In Priceline.com's fourth quarter of 2005 earnings call on February 16, 2006, CEO Jeffery Boyd characterized 2005 as "a transformational year for Priceline." There was a massive hype around the Internet, and as a result, there were hundreds of companies saying, we're going to sell hotels online. We bumped into them periodically. Here's a great disrupter for you. So people copied Booking.com site features. When you dig into this oral history of Booking.com and the two deals that were its foundation, you'll see, to paraphrase Howes, that the evolution of this business has indeed been quite a ride. When we got closer together, we discovered that our models were even more similar than we realized. Searching for a cheap hotel? She worked for Diarmaid Russell, who worked for an English guy, Simon Breakwell, based in London, who was responsible for Expedia's development outside the U.S. We did talk to him at some length. Certainly, in the partnership department and affiliates, we had our way of working. So a solution had to be all-encompassing. We're much better on the continent and we're primarily good in SEO [search engine optimization] and SEM. Nightly rates starts at But Booking or any of the online travel agencies? Those are disrupters. It was to think about if there was value in cooperating because they owned the British market and we were very strong in continental Europe. At Active Hotels, we talked about the business model for, I'd say, the first six months. And hotels didn't like the cash flow implications of it. No. Individual hotels and small hotel chains often cannot afford the expense of these direct connections and turn to other companies to provide the connections.[1]. There would be a lot of arguments at the board level, heated arguments at the board level, but once the decision was taken, it was implemented with ruthless efficiency. At Booking.com they did an academy. I was running that small, opaque-only travel operation. Priceline.com had figured out by 2003 that it didn't have the marketing resources to turn Name Your Own Price into a global business, as was the initial vision, and it wasn't a good fit anyway with consumer habits and behavior in many parts of the world. 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