Priceline Switches to Booking Holdings and Reports Strong Earnings
February 28, 2018
Priceline officially changed its name to "Booking Holdings" on Tuesday as it reported Q4 results. Overall, Booking Holdings reported a strong Q4. CEO Glenn Fogel joins Cheddar to break down the name change and earnings news.
Q4 revenue came in at $2.8 billion, ahead of estimates, and 19% higher than last year. After earnings were reported, shares rose about 6%.
Fogel says that travel is what drives the business and that is still strong. When asked about compeition, Fogel is confident in Booking Holdings position in the market. Fogel says the great thing about booking.com, is that it is instantly confirmable. Fogel also touts that there is no booking travel fee with their businesses.
Glenn: If I want to try in the business is, travel is strong and we are offering a great, great selection, we are offering great prices, great service. So, when you combine those two things together, that's whats driving the growth.
FEMALE_1: And what about, sort of a slow down. From that 26% growth, from the previous year.
Glenn: We are a big company, and the law of large numbers is one thing we point to a lot of times.We talked about how, when you get to a certain size, you're naturally gonna have some growth deceleration. We've been talking about this for many many years. So I don't find this as abnormal.
MALE_1: One of your best competitors in this space, Airbnb. How do you feel like you're positioned yourself against them?
Glenn: So, Airbnb is a fine company. It's a great company, and they're doing alotta good things. But the thing I really like is, we have the same product, only I like the way we put it out much better than how they put it out. I'll give you some examples. Right away, many times, one doesn't know, I don't know. Do I want a home, an apartment, or do I want a hotel? I don't know, I love it on booking.com, which is our biggest subsidiary. You see both products right there side by side, you can look at the reviews right there and compare and contrast. The next thing is, I've used some of these other services, we have to go back and forth because it's not instantly confirmable. The great thing about booking.com is every single property, whether be a home, an apartment, a yacht, a castle on the line, whatever it is, it's instantly confirmable, so I don't have to go back and forth. It's done, it's there. Another thing is, I don't wanna think, if I go through all the trouble, there's a service fee, a travelers' service fee. So, you go through the prices, one thing and then you find out it's something else. Booking.com, there is no traveler fee right away. And then what's really important is, if something's not right, you have the backing up of booking. com customer service, that's 24/7, they do it in 43 languages. Trust is a real important part in this biz. Particularly, when you're using what is called the non-hotel accommodation area, non-traditional, because you know, you're saying is it really what it says it is? And you're concerned. Well with booking.com, you have that booking trust. And you know if it's not right, they'll make it right.
FEMALE_1: Right. Well Glenn, I know you know all the answers to all of these things. [LAUGHTER] which you have think about every single day, and I don't envy your position. You've got Airbnb coming up as a startup, Google, now letting you book directly through its search results, and then you've got hotel chains that also are trying to incentivize customers to go to their own native platforms with promotions, discounts, free Wi-Fi, what have you. How are you trying to steer this company, when you've got competitors coming at you from all different angles?
Glenn: And you are right. Look, this is a competitive place, it's been a competitive place for a very very long time. One of the key things about all this though, is making sure you get the demand. Getting the customers to come to us, and then being able to put them in the bed, whether it be a non-hotel accommodation, or a hotel, whatever it is. When you solve that problem, when you have that demand, then the supply people, the hotels and whoever it is, they want to deal with you, because they want to get those customers. We've done a great job being able to give people a service that makes them want to come to us, so they can get the biggest selection, the greatest prices, all things like that.
FEMALE_1: Right. You got all these resources to back that up, you've got the the networks in place to do it, I totally get it. But your marketing costs are also increasing as a result of all this competition. As of that last quarter of 2017, you spent over four point one billion, in what you're calling performance advertising alone. Do you expect these costs to continue to increase?
Glenn: Well the important thing to look at that really is, what were our lines. Who's was returning, who are we leveraging or deleveraging in our what we call to be our advertising expense. And when you look particularly in the paid for performance, that's for things like Google and Metta, and things like that. You'll see we had great leverage in that quarter. We were a little smarter about optimizing in that area, but what we also want to do is put some of that money that's in the pay for performance, we gonna take that and put it into brand advertising. Balance out a little more, because what we really need to do, I believe in the long run, is get people to come to us directly, then we won't even have to talk about those things if we can get them and come to us directly more.
Glenn: To do that, we've got to make more people aware. You know we changed our name.
Glenn: Part of the reason, is because we want people from, say America, to know that booking.com name, it's not as a way- if you are not as aware of booking.com, here is it around the world which is the biggest thing.
Glenn: By doing some branding, we'll get those people to come to us direct more often.
MALE_1: And is that why you've shifted most, more so to look at television ads, as opposed to online ads. You feel like that's going to be the best ROI for you?
Glenn: You wanna be careful on this. So online advertising, you can't have branding advertising online. You know that. Because we spend money with it . So the thing is, what's important, is making sure that we're doing it in a smart way. So you wanna make sure when you are advertising- brand advertising, whether it's online brand or TV, what you want to make sure is happening, is you're getting the right response you want. So what we're using is more science now than we used to. And I think in the long run, I'm looking forward to make more more progress in that area.
FEMALE_1: Inside the U.S, Priceline has had I guess the bigger brand recognition here thanks to William Shatner who comes and goes sometimes. Will you ever bring William Shatner back, and what does he think of the name change?
MALE_1: Or is this all Kaley Cuoco now? .
Glenn: Well, here's the thing is, one of the things is, look Bill was great for our company. He helped build Priceline.com for a long time.
MALE_1: It's enormous.
Glenn: It's just wonderful et cetera. And that's great. And Priceline.com is still incredibly powerful brand. You make the right point. They're doing some fantastic things in terms of real close in deals, and doing things for that value travel that are really good, they got a new packaging product coming out that I think is just absolutely fantastic. So they're doing a lot of good things. In terms of who we're gonna use in the future, I don't wanna give those things away.
FEMALE_1: All right. [OVERLAPPING]
MALE_1: But you is sitting right here. We'll take it. We'll do it.
FEMALE_1: No clues if William Shatner will come back. Glenn Thank you so much for joining us. Glenn Fogels, CEO of Booking Holdings, aka formerly known as Priceline.