One of the largest US-based online travel agencies is in talks with Emirates Airline and UAE government departments over plans for new tie-ups to drive tourism in the emirates.
Nasdaq-listed Priceline Group, which owns popular hotel bookings website Booking.com, is eyeing corporate partnerships in the Middle East to tap into a market it claims has strong growth potential.
Booking.com expanded its listings in the region by about 25 percent over the past year, comprising 200 new properties, the company said.
In Dubai alone there are more than 1,000 properties listed on the global travel website, of which 400 are private homes for rent and the rest are hotels and guesthouses.
In an interview with Arabian Business, Priceline Group president and chief executive of Booking.com Darren Huston said he had met with government representatives and the chief commercial officer of Emirates Airline – among other parties – this month, to discuss potential tie-ups.
Booking.com is already partnered with more than 100 airlines across the world to market their hotel packages. It has also started forming affiliations with destination marketing companies that aim to promote city-specific tourism.
Globally, this is a new area for Booking.com – existing partnerships are mainly in the US, in cities such as New York, San Francisco and Miami. However, Huston said: “We’d love to do Dubai next. A regular destination marketing firm cannot contract every property, it’s too much work and they can’t drive enough bookings.
“But they want to be able to offer e-commerce on their websites and we can provide the hotels, restaurants and rental cars sought by visitors to their city.”
No deal has yet been signed with either a Gulf airline or Dubai’s tourism agencies, but conversations have been “very positive”, Huston said.
A partnership with Priceline Group could be of value to Middle Eastern cities that have ambitious tourism targets. Dubai in particular has set itself a target to bring in 20 million visitors by 2020 – “for us, there are questions like, can we help them to bring more guests to this part of the world, and what are the tools we can use to do that?” said Huston.
He added: “Our mission as a group is helping people to experience the world and we do this through consumer facing Internet brands – all of which are in the business of generating demand for tourism and related services.
“Everything we do is a two-sided marketplace. We are not selling books, fridges and so on, we are selling people who travel – they have to start somewhere and go somewhere. This is a very valuable resource.”
Meanwhile, Booking.com – which takes a 15 percent commission for each transaction – has begun expanding into the private rentals market, listing apartments and villas as well as hotels and guesthouses.
This places Booking.com in a similar sphere to popular rentals website AirB&B but Huston believes it is sufficiently different.
“[AirB&B] were a classic Silicon Valley start-up. Our business is much more classic e-commerce: bookable, you buy something at the price we said you’d get it. In AirB&B there is a lot of negotiation, personal interaction with the renter, emails going back and forth and so on. We respect them a lot; it’s just a different experience.”
However, the expansion into what Huston terms ‘long tail’ properties could place the UAE hotels sector under further pressure at a time when it is facing the problem of rising supply and falling room rates.
Average daily room rates at four and five-star hotels in Dubai fell by 12.8 percent in April to $373.78 from the same period in 2014, representing the biggest decline in four years, according to hospitality data firm Hotstats.
Aside from Booking.com, Priceline Group has plans to grow the regional presence of its other brands. For example, it is in talks with authorities to open an office for newly acquired restaurant bookings website OpenTable in Dubai within the next 12 months. “Here is where the growth is coming from,” Huston said.
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