Priceline, Travelocity take steps to increase share

By Danny King
Priceline and Travelocity recently launched new branding and service initiatives, respectively, in an effort to shore up their market share amid a leveling-off of online travel agency (OTA) bookings in the U.S.

Priceline, which in 2010 overtook Expedia as the world’s largest OTA by sales because of its overseas growth, is launching its first U.S. ad campaign for its Europe-based Booking.com division.

Long known for its “Name Your Price” tagline and for TV spots featuring William Shatner as “The Negotiator,” Priceline is unveiling the Booking.com campaign, titled “Booking.yeah,” with ads on TV, online and in movie theaters. Booking.com lists more than 265,000 properties in 178 countries.

Meanwhile, Travelocity, which is owned by Sabre Holdings, last month debuted what it says is the first free personal concierge service offered to vacation-package customers by an OTA.

Specifically, Travelocity customers who book a vacation package involving an airline-hotel combination on the site will be emailed the phone number of a concierge who will be able to provide information on subjects such as restaurant and theater recommendations, golf reservations and spa-booking services.

The concierge will be available from the time of booking until two days after the trip is completed.

Travel Guard, which provides travel insurance for Travelocity customers, will be providing the in-house service representatives.

Travel Guard said the representatives were trained to provide concierge services as well as medical assistance and other forms of travel assistance.

Travel Guard, which is owned by insurance giant AIG, has provided such services to its customers since 1985, according to company Vice President Scott Adamski.

The moves mark efforts on the part of Priceline and Travelocity to gain ground on Expedia, which is by far the most-used OTA by Americans. Expedia last year increased its market-share lead in terms of U.S.-based OTA bookings to about 43%, from 42% in 2011, while Travelocity’s and Priceline’s market shares were 16% and 11%, respectively, according to PhoCusWright.

And competition for those bookings is tightening as more hotel and airline suppliers improve their websites and online booking capability in order to cut distribution costs.

While online travel bookings from Americans, which will total $136 billion this year, are increasing at about 7% a year, the OTAs’ collective share of online bookings will shrink to 34% in 2014, from 39% in 2010.

Priceline acquired Booking.com in 2005 for about $133 million. Along with Asia-based Agoda (acquired in 2007), Booking.com was key in propelling Priceline’s global sales past Expedia’s in 2010.

Travelocity’s foray into concierge service is the latest effort by OTAs to bring more elements of personal service to the online world.

For instance, in 2006 Expedia launched its Expedia Local Expert feature, which involves having staffed desks at hotels in locales such as Hawaii, Las Vegas, New York and Orlando.

“I’m not sure this alone will be enough to help it narrow its market-share gap,” said Hudson Crossing travel industry analyst Henry Harteveldt, adding that the proliferation of mobile-phone travel applications might make this sort of service more commonplace during the next few years.

“If Travelocity is able to offer better pricing or provide the traveler with the assurance that they’ve vetted the providers and their products, that may help.”

Follow Danny King on Twitter @dktravelweekly. 
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