You got to milk the cow to survive in the OTA farm

So there I was – I had just written my post about how hard it is to build an OTA of any consequence and during the first session I attended at ITB Berlin, Darren Huston, President & CEO of Priceline Group, was talking about “milking the cow”.

Darren Huston: You have to keep milking the cow.

“Our employees are workhorses, not show ponies and you have to keep milking the cow. If you stop, they stop giving milk. You have to work the system like a farm,” said Huston, who (naturally) grew up on a farm.

He spoke about the bottoms up culture at the group – how everyone is an innovator, how the 13,000 employees worldwide are broken up into small teams and how innovation happens from the bottom.

For example, he said, the Booking.com website is broken into 40 pieces run by 40 teams. “At any moment, thousands of experiments are happening, they don’t come to me for approval.”

For instance, there is a team just focused on guest reviews and figuring out how best to present the reviews to customers.

The primary performance indicator is conversion but he said there are now secondary factors such as loyalty and service cost. “If the test is significant in driving conversions and loyalty, then it goes onto the site. If it doesn’t, then they have to figure out what’s wrong.”

Comparing Booking to Microsoft where he used to work, he said the latter was a platform while Booking was about taking technology to the real world.

“The work we do is very complicated – it’s a dynamic space, it changes at a rapid pace. Players change very fast and customers change even faster. You need to build scale systems to handle all the stuff that happens in the real world.”

He reiterated Booking’s philosophy of product before marketing. Having said that, of course, Priceline spends billions on Google. “We are the king of direct response and Google is the world’s biggest platform. But even Google is not growing fast enough and we need more platforms.”

Which is why he wants platforms like Facebook and Twitter to figure out how to help his business win more transactions.

Lately though, Booking has taken to TV advertising primarily in the US, Germany and Australia and while it’s harder to measure, “in some of these countries, people don’t believe you unless they see you on television, especially in the US.

“My 12-year-old, he doesn’t watch one screen at a time, we are in a world of multi-channel media consumption – as he watches an ad, he is booking – so there are rough tools out there to measure performance.”

A fan of the Uber model, which he says is truly disruptive, he said, “It’s about spontaneity, ecommerce on the run. Young people just expect that.”

He said mobile had changed how consumers search and buy hotels and given rise to “wanderlust” where people just go to places and meander. “They know they’ll get a hotel. It’s completely unplanned travel and it’s where mobile intersects with wanderlust.”

Booking.com now sees 100,000 transactions a day on mobile, he said. “The behaviour has changed so much, if you are not relevant on mobile, you are not relevant.”

Huston also talked about the B2B line of business Booking is building out with Booking Suite, following its acquisition of Buteeq.

“It’s interesting – Open Table wanted to sell reservations in restaurants then they found most of these restaurants did not offer online reservations, so they started with a B2B proposition and are now going into B2C.”

Huston calls hoteliers to farm out their technology to people who know how to “milk the cow”. (Image credit: JuanDarien/iStock)

With Booking Suite, the company can build websites for hotels for a fraction of the costs plus translate into 45 languages, and offer services such as web hosting services, booking engine and a whole set of services.

“Most hotel websites are built from brochures, they are not built to convert.”

The question is whether hoteliers are comfortable giving their business to a company on which they are already so dependent for bookings.

Said Huston, “It does take a lot of trust – “what, you already get our business, now you want to build our website?” What we want to do is get them out of technology into the hotel business.”

In other words, to use his farming analogy, hoteliers should farm out their technology to people who know how to “milk the cow”.

Read more on http://webintravel.com/

 

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