Priceline Shifts Model in Asia
Fixed-Price Bookings Grow Abroad, Where Name-Your-Own Price Doesn't Fly
When Chaiwat Topitumatukhun opened his Postcard Resort in northern Thailand last year, he knew his best chance for success lay in tapping the Internet to market his boutique hotel to tourists around the world.
A former airline executive, Mr. Chaiwat listed his property on Agoda.com, a discount Asian hotel reservation site and a unit of online travel agent Priceline.com Inc. Bookings started coming in within two weeks. The five-unit hotel has hosted guests from other parts of Asia, Europe and the U.S.
"It's a cost savings to us, as opposed to relying only on travel agents on the street, and we can reach the world by using their system," said Mr. Chaiwat, who has also set up a Web site for his property.
Agoda is Priceline's effort to find new sources of growth in Asia as its U.S. and European business mature and face increased competition.
Like Priceline's European business, Agoda offers fixed-price listings and takes a cut from each booking.
Priceline Chief Executive Jeffery Boyd said the "name-your-own-price" model is not as suitable for Asia and Europe as it is in the U.S., where well-known hotel chains and the widely used star rating system offer customers consistent and well-understood levels of quality.
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Source - The Wall Street Journal
