Wednesday, February 18, 2009

Priceline Singapore is still alive and claiming 10% growth

The headline above does not make for that interesting a read, unless I tell you more of the background. First to the story and then to the background. I came across an piece on the Nanyang 100 website with an announcement from Pauline Chian - a manager at Priceline Singapore - that sales are up 10% at Priceline Singapore (despite the recession). She attributed the success to (primarily) the absence of a booking fee on flights and (less importantly) the name your own price model.

The reason I found this interesting is that it is the first news report I have come across in years referring to Priceline Asia. Priceline Aisa is a not a wholly owned part of Priceline Incorporate (PCLN). It is a joint venture between PCLN and Hutchison-Whampoa - with Hutch as the major partner. Hutch is Asia's biggest company - into everything from property, ports and telecommunications. Up until 2006 Hutch was also the largest shareholder in PCLN. The JV is not related to Priceline's other businesses in Asia (Agoda and Booking.com offices).

Formed in 2001, the JV spent a lot of money in the early days on staff and marketing. A lot of the marketing was in kind with related Hutch companies providing in-store and media contra marketing. A large investment, lots of momentum, unmatchable buzz .....and near zero results. The business soon had to reduce staff, dramatically scale back marketing and bring in other products in addition to the Name Your Own Price model. The Asian market place simply did not take to the NYOP model. One insider told me that they believed that the discounts were simply not enough. That campaigns advising consumers of a potential 20% saving for NYOP did not provide enough of an incentive for the consumer to risk opacity in suppliers in Asia. Another theory was that NYOP needs a very large domestic market with relative similarity between air suppliers and star rating certainty in hotels - factors which do not exist in Hong Kong, Singapore and Taiwan. Either way the business fell of the radar screen of observers like me and travel suppliers and customers that I spoke with.

I can't recall the last time I saw and announcement or marketing piece from Priceline Asia. I haven't even heard them mentioned in those now ubiquitous press releases from meta-search companies announcing a distribution deal with an intemediary like they were M&A deals.

Thus my curiosity is piqued. If Priceline Asia is growing and starting to make industry noise again, then are they trying to make a come back? Or is it just that by adding more and more news feeds to my reader I am simply coming across more stories that I used too? Any Singapore, Hong Kong or Taiwan based readers able to tell me if they have been hearing any Priceline Asia noise recently?

3 comments:

John said...

Haven't heard about Priceline Asia recently but it would be strange to see them pop up as they already have Agoda and Booking which both seem to be pushing hard.

Maybe Hutch is having second thoughts..

Anonymous said...

I have seen them pop up a few times for flight searches on wego and if my memory serves me right - they were even promoting their name your own price option on wego . so they must still be actively promoting themselves

Steve Sherlock said...

guess that's the challenge with commenting on any non-listed company (presume this is the case?), that earnings are not verifiable!

f.ex. i could tell you than I’m earning $5mil in profit and get oodles of press for this year but how could you verify it.

though ultimately - if a brand has long term aspirations, they would not dare bullshit like that. (you'd hope)

Steve