Thursday, May 31, 2007

Booking.com numbers broken out of Priceline results

Priceline released their numbers recently and I decided not to report on them originally. They were great numbers (even though losses widened due to litigation expenses) and analysts put up their expectations all over the place. In addition the numbers confirmed the pre-eminence of Priceline in Europe with European sales eclipsing US sales for the first time. The reason I did not report on it was because while this was a great story it did not add much to my other reports on the company. I had already commented on how they are getting it right in Europe and right in integration of Booking.com and Activehotels.com.

However the recent announcement of a new UK MD for Booking.com (Rachel Howes) has encouraged me to blog about the Priceline European results. The reason is that the report I found on Travelmole does something I have not seen from Priceline before - it breaks out sales for a brand. Specifically it states that Booking.com annual gross bookings are €1.2 billion on 12.5 million room nights sold in the 12 months to March 31. This is the first time I have seen a combined sales number for Activehotels and Bookings. Clearly puts them as the largest in hotels in Europe.

Important to remember that Booking.com charges no reservation fee or cancellation fee and takes nothing upfront from the customer. As a result there is likely to be a higher cancellation rate for Booking.com bookings versus other players. My guess is at least a quarter - increasing the total booked room nights with Booking to the 15 million room night level. I am sure that the cancellation rate it is a highly tracked metric and should have a team on it working on product and marketing ways to reduce it.

UPDATE - received an email from a Priceline representative who noted that Priceline have broken out European results in their reporting for the last few quarters. This is correct. The difference I was making was between highlighting "European results" and "highlighting brand results". I had assumed that European numbers had included the sales from the Priceline branded European sites (ie Priceline.co.uk) and not included sales on Booking.com branded sites (including Activehotels.com) generated from customers outside of Europe. I have asked for clarification on whether or not the Booking.com numbers from the above are the same as European numbers or if there was a difference. Will let you know when I hear back.

2 comments:

Guillaume said...

Hi Tim,

Just to clarify something about your post.

Rachel is not the new MD of Booking.com. She's is the UK MD of Booking.com managing the office in Cambridge (which was Active Hotels in the past).

Guillaume

Tim Hughes said...

Guillaume - thanks you are right. Change made