The Priceline Group had a “solid” third quarter in terms of both growth and operating results, chief executive officer Glenn Fogel said during the company’s earnings call.
Booked room nights totaled 178 million, up 19% over the same period last year.
But those numbers don’t tell the whole story. Last year’s third quarter generated the highest growth in room nights in several years, making for a difficult year-over-year comparison.
In addition, the group has been paying particular attention to alternative accommodations, which typically offer far fewer rooms than a hotel property.
The vacation rental business requires more attention than hotels. Property owners are generally less sophisticated than hoteliers, and the sector requires a higher level of customer contacts, as well as increased support and staff.
“We are not the leader in this space,” Fogel said. “That’s why we’re spending money on it.”
The Priceline Group is investing in technology, including artificial intelligence and machine learning, to reduce the overall cost of rental properties by adding more automation to tasks such as onboarding, he said.
Why is Priceline, which includes the mammoth Booking.com, taking the trouble to corral this piece of the accommodation market? “We want to be the leading platform to search and book all type of properties,” Fogel said.
For his family’s most recent holiday, they decided to stay in a vacation rental in Iceland, but when Fogel searched his company’s websites, he didn’t like what he saw – or rather, what he didn’t see. He wanted to see more properties, more types of rentals, more locations, more of everything.
The fact that Expedia, the No. 2 player in the market, acquired HomeAway and its family of brands two years ago, may also serve to inspire Priceline’s interest in the sector.
During the third quarter, Booking.com showed continued momentum, with approximately 1.5 million properties on its platform, up 41% over last year, Fogel said. “This represents 26.9 million potentially bookable rooms, which we believe to be the largest, and most diverse, selection of instantly bookable accommodations in the world.”
Booking.com also is showing good growth in the US, he said.
Fogel said he was “pleased” with the performance of Kayak, the meta search engine that Priceline acquired in 2012. It is “being run very responsibly by Steve Hafner,” he said.
Priceline, which previously invested in Ctrip, the Chinese online travel company, last month contributed $450 million to a funding round for Meituan-Dianping, a Chinese lifestyle-services internet platform. The round was led by Tencent Holdings, China’s social media giant.
The Priceline Group reported net income of $1.7 billion for the quarter, up from $506 million in third quarter 2016, on total revenues of $4.4 billion, up from $3.7 billion.