"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. One of the methods online travel agencies use to collect revenue from hotels. Lastminute sort of hit the scene in the back end of 1999. Source: Jeremy Schaal, Jarislowsky Fraser with input from Skift Research. We went back and forth to Cambridge on a regular basis. Companies like Yell.com. - Jeffery Boyd, Booking Holdings chairman, - Shane Whaley, formerly Active Hotels and Booking.com, Catawiki, HealthCare.com, 3D Hubs, investor, Time Out Group, managing director e-commerce, GetYourGuide, regional director, sales and supply, Americas, GreenTraveller, GolfBreaks, director; consultant, Business Travel and Future of Work Summit, Booking.com turned all the other online travel agencies into converts, The Definitive Oral History of Online Travel, Priceline.com acquired Active Hotels for $161 million, Priceline.com acquired Bookings B.V. for $133 million, Travel Industry Outlook: Post-U.S. Election and Post-Vaccine. They were amazing. So, you know success always has many authors and I think there's more than enough value from both companies, going into that. I was pretty successful in that. Actually, we'd never heard the phrase, the agency model. I'd like to know more. I said, "Oh great. He had appointed — I think it was UBS or someone — to really put together a strong deck that would support why we were a great company to buy. I just remember, at some point, we had Glenn Fogel, and quite a few others descending on Cambridge to meet with us. So I made a deal with Bookings.nl that they would build my chain's website, and then in turn they would book the properties also on Bookings.nl. He didn't know what a rack rate was or any term that was used in the hotel industry. We had the full legal due diligence, as well. I realized very quickly that we needed to have a retail product, selling travel the way everyone sold and bought it, which is with the pricing disclosed. Bangkok, 593 Hotels Visit the city of Angels. It was at this time when Kees Koolen [marketing director/COO of Bookings.nl/Booking.com 2001-2008] came into the picture. 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. They don't have online marketing. There has to be some degree of trust in any business merger. This is fantastic. Bookings' Arthur Kosten has a tale to tell in that regard that is one of our favorites. The reaction, I'll tell you. That means probably a trade sale to a large existing player. I was purely tasked with signing up partners. We had two or three trips to the States during the summer of 2004. I think I was known as the handbrake or Dr. No. I don't want to say we were complacent, but we had quite a good track record and success on that. The first reason you look at an acquisition is the people: Arthur Kosten, Kees Koolen, and Stef Noorden, and so many other people. Bookings was very strong in Benelux and France, and we were really strong in the UK so we didn't step on each other's toes too much. The content on many hotel reservation systems is becoming increasingly similar as more hotels sign up to all the sites. The historical context was that the company's strategic plan was to have Name Your Own Price businesses in all the major parts of the world. We're growing really fast. A couple of months later, Glenn actually came into GTA's London office. They must have spent quite a lot of money on it. We had spoken to Expedia at some length, and we'd been in touch with Expedia for quite a long time just through meeting at conferences. We're looking at them and say, "No." Please contact their customer support team to process a booking cancellation before the arrival date. We had ventures in London, Hong Kong, and in Australia. Online hotel reservations are also helpful for making last minute travel arrangements. That was to enable us to have a retail hotel product in the U.S. But I believed in what Active was trying to do. It was a super company. After 9/11, General Atlantic was no longer willing to fund the venture. Our first 500 hotels were connected using these phones. I think Booking was bought for $140 million [actually $133 million versus Active for $161 million] and we were slightly more than that, but subsequent to that transaction, there's been so much value generated. Search cheap hotels with KAYAK. The two Web servers were under Bruinsma's desk. So that kind of crashed and burned as quickly as it came. If there was one sector that seemed to make complete sense for the Internet, it was travel. online hotel booking sector by a group of eleven EU competition authorities in 2016.1 The exercise was commissioned by the heads of the European Competition Network ('the ECN') in November 2015. It was Bookings.org when the transaction was actually done. We worked very, very well together, and Gillian's a hard worker. 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. Online travel agencies receive a net rate from the hotel, and mark it up to determine a retail rate at which price they sell the stay to consumers. But you know, Glenn, he's a very charming and friendly guy and we had a great conversation. So a solution had to be all-encompassing. It was a very clear pre-due diligence process. Nowadays, online travel agents have pictures of hotels and rooms, information on prices and deals, and even information on local resorts. They were looking for ways to come back in. They're like the Dangerous Brothers. It was a pretty small team. When are we going to need rooms? I also did meet Glenn, and I met Mitch Truwit [then Priceline COO], as well. I couldn't get rid of them. And there are definitely different styles between people but I think both cultures were very, very focused on numbers. First World Hotel. With Europe's leading hotel booking portal HRS you are guaranteed to find what you are looking for. There probably were. 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. The merchant model would have been better cash flow for us, but by 2002 we were profitable anyway so we didn't really need the cash-flow benefit. In particular, the guys at Booking.com, after the integration of the two, including Kees Koolen, Arthur Kosten, Pieter van Doorne, and Adrian Currie came from Active Hotels, really did a great job scaling the business. 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. And Stef, Kees, Arthur, Matthew Witt, Adrian Currie, Rachel Howes, all those people worked really, really closely together to make that value happen. 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. The emergence of Booking.com as a powerhouse in hotel bookings put pressure on Expedia and others' commission structures, and rates have been descending for years, particularly for the big chains. I'm quite a forceful woman. It was a great acquisition. That's why I moved. Or slow them down. Then you'll look at the menu and look at what other people are having. Three years later in Cambridge, UK, cousins Andy Phillipps and Adrian Critchlow, a duo which one of their peers playfully described as the Dangerous Brothers because of their-sometimes overly exuberant thinking, likewise thought they could build a better and more locally relevant business than Expedia, Hotels.com, and Lastminute.com by focusing on independent hotels. He came with his VP of product, a chap called Patrick Healy, an Irishman. We didn't have the budget to go big direct-to consumers so we actually just focused on processing bookings as efficiently and effectively as possible. You know, the UK guys were going, "What about Active Hotels?" We made that acquisition first. For example, Expedia, which was owned by InterActiveCorp, looked at both Bookings.nl and Active Hotels and, for various reasons, didn't make an offer for either. We had landing pages before the term landing page existed. It wasn't that we weren't listening to that research; it's that we thought, let's try it, and both consumers and hotels didn't like it. Priceline Europe, which now included Active Hotels and the newly acquired Bookings B.V., "had an excellent quarter with $158 million in gross bookings and an organic growth rate of 88 percent, accelerating from 76 percent in Q3 and significantly in excess of that reported by our competitors," Boyd told investors and analysts. He won't be asserting, directing or forcing the direction of travel in any obvious way. 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 remember because we all had a profitability bonus. So when you buy these guys [Bookings], it's going to be one class of equity afterwards and you will all be in it together. Maybe we should do a deal with you at Active." Every day we were adding new affiliates. So that was my pitch to Glenn. Also called free or organic search. They brought some super people on board. But even before that, to do retail air, we had bought another company called Lowestfare, which we bought from Carl Icahn. And just hand it off. And, you know, the dot-org was an ideal URL for Bookings. Goibibo offers clean, safe and hygienic Hotels with Free Cancellation option. Very soon after the acquisition, we moved the essential gravity of the business to Amsterdam. And Octopus started selling online even prior to Active Hotels, but Octopus was selling wholesale rates that were meant for tour groups. OK, that's not a big deal. 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. We knew the Dutch guys reasonably well. A hotel, if they had anything open, was going to give us that last room. And, I mean, literally screw hotels, for want of a better word. It was a customer base and a website, and had some connections and contracts with the airlines. I had very little knowledge about the hotel industry. The merchant model is like what we use when buying an airline ticket; you buy it at the time you book. Hotels.com is a leading online accommodation site. Here's a great disrupter for you. in Thailand "I will keep on recommending Agoda to my friends." We tried it, and actually consumers just didn't like it. There were also people getting hired who really had a vision to where this company could go. He's the second Adrian at Active. And, it's a shame that only some people get their names mentioned because, as with any of these companies, there are a lot of people who don't get to have the public acclamation and acknowledgement of the hard work being put in to make these companies successful. So under Bookings.com Ltd., we were in charge of the French, the UK, and the Scandinavian market, a huge chunk of the revenue. They still do it today. And how much do you pay, how do we get your information? It came very fast. They had theirs. If you remember, in the UK, Expedia starting pushing out during 2000 and 2001. I've got a meeting I've got to go to." At that time, we had already closed down that joint venture in Priceline Europe. If you imagine, there are lots of people looking at that place so, probably, I'll go there. Travellers can book rooms on a computer by using online security to protect their privacy and financial information and by using several online travel agents to compare prices and facilities at different hotels. There was no trust paying up-front. We were all very excited because suddenly we weren't going to have to raise a ton of money anymore. Yeah, of all the companies around Europe, they were the ones that worried us most. 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. About Priceline, I don't have a bad word to say about them. He launched Bookings.nl after borrowing a bit more than just inspiration, namely some code, from the fledgling U.S. website, Hilton.com. BROWSE ALL DESTINATIONS. Does this truly, significantly alter the way people live? We did 4,000 room nights the other day, and we fill it every single day with just 50 people [employees]. At Active, there were in Cambridge about 13 people on the team. At the end of the month, or the beginning of the next month, we were sending an overview with all the reservations and they had just to check those reservations — which were cancelled — and we didn't charge them for cancellations. And I actually left Octopustravel shortly afterwards. I think the most common way to make a hotel reservation in those days was to get a phone number from a phone book or get the phone number from a travel guide if you want to go to Paris. There is plenty of news, if not scoops, that you'll read below. It was a very, very simple interface. We have to do this across Europe. The mobile convenience is one of those shifts in the way people live. That was his lot. You'll also read how Active Hotels and Bookings explored joining together before Priceline scooped them up in a deftly executed one-two punch. In re-imagining our international business, we thought of it as potentially a retail business, a much broader market than just Name Your Own Price. When I met Andy Phillipps and Adrian Currie [Active Hotels finance director], those guys knew a lot about how to build a technical company, but they had no idea about the hotel side of things. Let's just go home and why don't we do it another time." 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. Glenn was head of M&A [mergers and acquisitions] at that point in time. Prior to the Internet, travellers could write, telephone the hotel directly, or use a travel agent to make a reservation. I certainly felt that I could work with the people, but we might have to break everything up and start again with the technology. Then put your money where your mouth is." It's always slightly depressing when you're copying a business model that doesn't seem to be flourishing. Those items appear here with their permission. But every single one deserves it. 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. Glenn Fogel, who was our corporate development guy, shut down our business in London for us. But I didn't. Book cheap, budget and luxury hotels at great prices on best hotel booking site. They said, "Well, Stef could run it." We direct-mailed hotels. I've never seen a hockey stick play out, but this was a hockey stick playing out during the process. And, you know, she deserved it [her success]. It's through that initial partnership conversation. I'd been there since Monday. Certainly, in the partnership department and affiliates, we had our way of working. That's true of online marketplace eBay, which entered into digital payments by buying Paypal in 2002; Google grew its mobile and video chops through its acquisitions of Android and YouTube in 2005 and 2006, respectively; and Facebook reengaged a younger, Millennial crowd with its deal for Instagram in 2012. A problem in the beginning was that we had substantially higher conversions [than Expedia and others] but also substantially lower margins, and essentially it's the one-times-the-other that matters. Book your hotel online by using Traveloka’s technology. For example, we weighed the Priceline-Booking.com deal from the perspective of parent company Booking Holdings market cap of around $103 billion on June 21, 2018, and we gauged that Booking.com contributed around 85 percent of that value, or around $88 billion. 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. We copied a business called WorldRes, which was a U.S.-based business that was set up to be a distributor for hotels. And, I didn't really know what Priceline was at that time, to be honest. For more information, read our topic page on the hotel industry! The other was a bookings button. I was supposed to be based in Barcelona. He was never explicit about why, but we were good friends so I kind of understood it. In the first phase, we were just building the model, the product, and the culture. The problem was only about 40 percent of them had computers, and of those, only about half had what they called Internet access. In the UK, we tried a merchant model probably in 2002. We looked at Venere a couple of times. Essentially, that's what happened; then so Glenn came over. In 2002, I joined Bookings.nl. The Internet is giant change, right? The founders were having arguments and they really wanted to sell it, be done and leave. Whenever two companies come together there's always a risk of a section winning or losing but I would say the majority — and there were some people who got burned — of people went into it willing for it to succeed on behalf of the new combined entity. This was 1997. 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." I can't remember if there were others looking at the business at the same time. The science of appearing as prominently as possible in search engines without paying for advertising. It was not long after the dot-com bubble burst. I said, "Amy, I'm not coming home tomorrow. Increase Revenues Thanks to Upselling. We could always beat Expedia in a hotel discussion. I remember distinctly, I think it was in 2002, I want to say September, that we reached profitability. The folks at Bookings.nl were focusing on chain websites. I had the most exciting period of my career, and I can honestly say I feel super proud to have been part of the foundations of that company. The person I dealt with was Jenne Pierce. It opened up global opportunities in hotel bookings where Booking.com disclosed the room rates in advance instead of cloaking them in a relatively complicated bidding process. In July 2005, Priceline.com acquired Bookings B.V. for $133 million. 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. This property was one of the first to go online with Active Hotels. That compared with just 5 percent organic growth for Priceline's U.S. business. That was not too successful. The tricky thing to make that work — and part of it's a bit obvious — we were growing hundreds of percent. I was just the person in the room on that day. You'll go to a restaurant where there are lots of people. It was like, this is perfect. The online travel agency makes its money through hotel commissions. I was very close to telling Andy, "Gee, sounds interesting, but I'm tired. After two years, the business was going so well that I could hire someone. This is in 2003, early 2004. A screen shot of the Activebooking.com website on March 27, 2002. If somebody's thinking of setting up to compete with you, there's just no level of trust. We weren't interested in floating the company. I would just add it's something that people should not take for granted. 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. I'm trying to remember now; ebookers was probably pretty big. Many also allow reviews of the traveler to be recorded with the online travel agent. There were no up-front payment from the hotels, and we realized we needed to focus our business on the UK before starting to think about growing in France and Spain. The first known online booking tool was created at the beginning of the 90s, by SABRE and CIS technology provider. And, of course, one of the first people I called in my Rolodex was Glenn. Distribution through partnerships with other companies rather than brand-building by going direct to consumers. In my final year in university, I got in contact with the Internet and found it really interesting. I was supposed to go home the next day, Thursday. Priceline.com acquires Travelweb, Priceline.com Merges Active Hotels and Bookings to create Booking.com, Priceline.com changes name to The Priceline Group, The Priceline Group changes its name to Booking Holdings, Active Hotels, contracts manager, 2004-2005, Booking.com, director/managing director roles in UK, Ireland, North Europe, Middle East and Africa, 2006-2013, Active Hotels, European business development manager 2000-2005, Booking.com, head of strategy and communications, 2006. We came up with a cheap way of accessing the Internet using — you won't believe it — something called a Web Phone. I said, "Oh no, I need it for work." Jan ultimately later became a board member of the Priceline Group. It was time to start building a business. For me, there was a reason to sell my shares and to leave the company. 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. — raising his hand to say he was the one who decided not to buy Active Hotels or Bookings. And sometimes that gets more difficult if you get into a larger organization whereas they largely left us alone early on. This must have been 2003 or something. This stopped hotels and motels from offering cheaper rates on their own sites, over the phone or at the hotel desk. There are always strategies you're trying to work out. For us, we couldn't envision that it would become so big as it is now, but we were fairly confident that we could grow it a long way. So we did more of a pre-business plan and research than possibly we should have done in retrospect. In some ways — and you can look at its competitors' websites today to confirm this — Booking.com turned all the other online travel agencies into converts. What if we merged these businesses together?". And we were deeply impressed with all of these very famous people, [IAC CEO] Barry Diller and whomever. Some of the mapping sites in Europe were probably the biggest travel sites by volume, by some distance. I had a one-and-a-half-year old son at that time and I was going to love to spend more time with him. Whereas at Booking, because of the nature of the people running it, not because they're Dutch, but it was a slightly more top-down management style. I remember that we walked around that building and Kees literally said to me at some point, "You know? The result was Activebooking.com, which, in early 2001 after the dot-com crash, changed its name to Active Hotels. Well, and another great thing. Trust is massively underrated, and so I'm going to sound like some old fart here, but business works when people are working together. 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 believed at that time that the agency's model was preferable for consumers obviously because they don't have to pay up-front. All these sorts of things. Everything. The ability to work there and all of a sudden have mobile come in and have the industry, in effect, transform again. The offer Priceline made for Active Hotels was a good one. We just looked at each other said, "No. But then he'll say something that is so blindingly perceptive and summarizes all the previous conversations so well. 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's a disrupter. I mean, to be honest, we had the same problem with Priceline [about conflicting business models], but they were more relaxed about letting us get on with it. WorldRes was, interestingly, a bit of a competitor at the time, although they raised a ton of money, spent it all, and then disappeared. Well, I was in Trafalgar Square with Andy Phillipps, the CEO [of Active Hotels]. Glenn came in and made a quip when he left the meeting, and said something like, "Shane, you shouldn't speak so much at these meetings," because I was literally not allowed to get a word in. What follows is the oral history of the greatest acquisition — actually a pair of acquisitions — in online travel history. What stood out were the teams' intelligence and street smarts. The idea was that they would become an affiliate for us as a way to find out more about each other. 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. I was in the mineral water business. 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. The elegant History Hotel is located right by Istanbul’s city hall and 1,000 feet from Saraçhane Park. 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. I think a lot of it actually started from the early days of starting the destination sites.
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