Booking.com takes over hotel bookings on New York tourism website

Powered by Booking.com

The arch nemesis of Expedia is making new friends in the USA, and one of them happens to be none other than New York City.  Booking.com has kicked off an affiliate partnership deal with nycgo.com, the city's official tourism website, to power hotel bookings in New York.

American OTAs must be feeling the sting as the Amsterdam based Booking.com increasingly stomps deeper into American home turf.  Priceline group is already on top of the leader boards in Asia and Europe, according to PhoCusWright.

It appears the NYC site was previously powered by Travelocity, and I suspect that part of the decision to switch to Booking.com was the number of localized sites it has around the world.  Currently Booking.com supports over 40 languages.  This potentially allows NYC to tap into large international markets that are more likely to visit the tourism site compared to domestic travelers already familiar with NYC.

New York is one of the most popular tourism destinations in the United States, and this new partnership may be the tipping point for additional American tourism organizations to partner with Booking.com and appeal to a more international audience.  A quick search also shows San Francisco's tourism site being powered by Booking.com.

From a supply perspective, Booking.com offers 573 properties while Expedia and Orbitz have 508 and 447 properties respectively.

Priceline jumps on the sponsored listings bandwagon and lets hotels advertise on search results

Priceline's new sponsored listings program for hotels looks pretty darn familiar.  Why?  Competitor OTAs like Expedia, Orbitz, and Travelocity have all featured pretty much the same product on their own search results pages for several years.  Just like display ads, the sponsored listings are also a complementary revenue stream to traditional OTA margins on the materialized bookings.

The sponsored listings are all auction based, pay per click campaigns that shoot hotels all the way up to the highly desired numero uno position in the search results of a particular destination.  In instances when there are pages upon pages of cookie cutter search results, it's easy for hotels buried deep into the dog pile to ascend to the top and gain maximum marketing exposure.  These sponsored hotels will get to sit in the spotlight with more or less free advertising unless someone clicks on their listing.

Since Priceline just launched their sponsored listings program last week, I would advise hotels interested in pay per click advertising to sign up ASAP and target their future lean occupancy dates.  The early adopters will enjoy low cost per click because there will be less competition bidding up the prices in the auction.  But winning isn't everything.  To improve the performance of their campaign, hotels absolutely need to ensure their rates are ultra competitive with the market and their inventory is well stocked to maximize conversion and ultimately the campaign's ROI.



As a consumer you can spot the hotels with sponsored listings because of their faded background color and typically the words "sponsored listing" near the hotel name.  In the example below of Expedia's search results for Bali, the Viceroy Bali is visibly designated as a sponsored listing and commands the #2 ranking after Mantra Nusa Dua (which is part of the Daily Deals merchandizing that trumps even sponsored listings).  Let's face it, getting to #2 in the rankings isn't too shabby when there's a whopping 874 other hotels listed beneath.

Hotel Quickly's last minute mobile rates not so exclusive

Hotel Quickly is the Hotel Tonight ripoff here in Asia.  Both have super sexy UX and pride themselves on fantastic deals at the last minute.  Every day at 12 noon local time, Hotel Quickly pushes out several hotel deals in key Asian destinations.  If you read the mobile FAQ on how it works, Hotel Quickly claims that its deals are exclusive to their app users.  I decided to put their claim to the test today.

For a one night stay arriving in Singapore tonight, Hotel Quickly offered six hotels.  Two were called 'prime', two were labeled as 'design', and the last two were classified as 'comfy'.  I decided to compare the rates and availability of these six hotels across some other popular mobile booking sites in Asia . . . specifically Agoda, Booking, and Expedia.

Here are the takeaways.  Keep in mind I compared all rates inclusive of taxes and service charges, the "all in" price.

1) Hotel Quickly (green bar in graph below) fell short of defending their value proposition, at least for today.  Their app didn't offer even one hotel that had rates lower than any other OTA's mobile app.  Even the featured hotel they recommended, identified by shaking the phone, was only on par with Agoda and Booking's rates.

2) Expedia (yellow bar in graph below) lost out in some way with four of these six hotels.  They didn't have availability or relationships with Hotel Royal at Queens or Grand Park Orchard, so these weren't bookable at all.  They did show availability at Amara and Ramada, but their rates were $30-40 SGD more than their competitors.  Yes, I made sure I compared the same room types.

Hotel Quickly has come out with aggressive marketing communications to create consumer perception that their rates are exclusive over other booking channels.  They also have a very clever kickback technique, including a referral program that snags users 10 USD in credits when friends make a booking with the user's unique invite code.  Although the average last minute consumer is less likely to compare prices across multiple mobile apps, Hotel Quickly needs to up the game on their so called exclusive rates if it wants to create real and sustainable value for its app users.  

Awaiting Hotel Tonight's imminent arrival to Asia

Awaiting Hotel Tonight's imminent arrival to Asia

In the last several years we've seen a surge in new mobile apps that allow travelers to book hotels for same day arrival.  Headliner apps that recently emerged include Hotel Tonight, Hotel Quickly, and Blink.  In fact, last minute and same day bookings have become such a hot topic that most of the traditional heavy hitters have also jumped in on the feeding frenzy.  Priceline has its Tonight Only deals, and Hotels.com has its Local Deals for Tonight, and recently Hipmunk launched its own Tonight Only deals.  This space is getting more crowded as travelers quickly migrate to mobile platforms.

(Sep 9 update - Blink just bought by Groupon)

Of the new mobile apps, one of them seems to be breaking away from the rest of the pack.  Hotel Tonight, a product of San Francisco, just received another $45 million in funding.  Despite growing skepticism that some of these last minute booking apps won't be around much longer, Hotel Tonight's funding seems to validate not only its existence but actually underscores its future growth potential.  So where will its future growth come from?

The obvious answer is global expansion.  When I whip out the app here in Singapore, I'm told that I'm too far away from any destinations where Hotel Tonight has deals.  Hotel Tonight has roughly 3,000 hotel partners in North American and European destinations, and it won't be long before they start making room for popular Asian cities and resorts.

Having millions in its war chest will help spur product innovation and marketing strategies and ultimately make the penetrating road to Asia a bit smoother.  But the money won't buy the strong relationships with hotel suppliers the company needs in order to get the best last minute rates for customers.  To build up their relationships (and relevance) with suppliers, Hotel Tonight will need to demonstrate its ability to drive last minute demand when they need it the most.  This won't be so easy since the company's existing demand profile is largely from North America and Europe, and data shows that the long haul traveler typically makes hotel bookings well in advance.  To be relevant in the same day or last minute window, Hotel Tonight will need to localize its app across the fragmented Asian nations to tap the growing local demand from domestic or intra-region travelers.  After all, these are the travelers that not only book at the last minute, but they book in volume.  Competition is hot though, and Asia is home to Agoda, Hotel Quickly, and Check In Tonight who have been sourcing deep hotel discounts on mobile platforms for a couple years already.

Apart from global expansion, I can see Hotel Tonight increasing their bookable inventory beyond same day arrival.  Although this will deviate from its current consumer messaging of booking a hotel for tonight (as the comapny name clearly suggests), I believe that adding inventory for a last minute booking window of within 7 days or so would still maintain a clear value proposition to both bookers and hotels.  I estimate that more than 50% of online bookings are made under seven days prior to arrival, so the size of the opportunity in this booking window is tremendous . . . especially for a company that has to date limited its focus to just same day arrival.

No Asian cities for now.  No . . . San Francisco and Vancouver don't count as Asian cities!