In the Hot Seat: Jeffery Boyd

Jeffrey BoydTravel Weekly technology editor Dennis Schaal sat down with President and CEO Jeffery Boyd to discuss Pricelines launch of a full retail offering.

Q: With your launch of hotel and car and its integration with your opaque business, do you see Priceline directly competing with Expedia, Travelocity and Orbitz? Is there room for another player?

A: I think the market is certainly big enough to have room for four large players to grow and prosper.

Q: What will your new offering do for your market share?

A: If you look at how Priceline performed over the last 12 to 16 months, we grew faster than other online travel agents because of the successful introduction of products and entry into new markets.

Retail airline tickets (launched in January 2004) was a big piece of that. If the new product launch for hotels is anywhere near as successful, I would expect our business would gain share and continue to gain share as we have done historically.

Q: Would you gain enough share to unseat one or more of the Big Three?

A: Through a combination of organic growth and acquisitions there is a possibility for us to get to be of the same size as the three largest players. Travelocity and Orbitz are a little more than twice our size in terms of gross bookings, so under any scenario, its not going to be easy to catch them purely from organic growth.

Q: How are you going to differentiate yourself?

A: I think we have a built-in advantage because our brand is shown in all the studies we do to score very highly in value attributes. People think of Priceline as the place to come for the best deal in travel.

Q: In adding retail to your opaque business, arent you almost competing against yourself?

A: Thats something we were concerned about when we launched the airline ticket product. What we found was that we were able to convert customers we would have lost, customers who would have not purchased an opaque ticket because they wanted to pick their own flight times. We found with airline tickets that the retail offering was mostly incremental business. We were down 40% prior to the launch of the airline ticket product, and we were able to flip that to be up by more than 50%.

Q: Now that you have a full-fledged retail product, will you participate in the meta-search engines?

A: If they want to be partners of companies like Priceline and the other large online travel agents, they are going to have to establish a value proposition to us as advertisers. They represent one set of tools, which until now has not gotten broad traction with customers. The only reason they are a topic of conversation is because Yahoo and AOL have decided to turn their fire hose and traffic onto these businesses.

To contact reporter Dennis Schaal, send e-mail to [email protected].

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For more details on this article, see "Priceline ups retail offerings with hotel, car rental bookings."



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