I wanted to put an advertisement for Bookings in the Telegraaf in the Netherlands, which was the biggest newspaper at that time. It wasn't going to be a front-end, it was just going to be almost a GDS [global distribution system]. I could see the dollar signs. We had the full legal due diligence, as well. Would you like to have a conversation with them? In Europe, booking a hotel was like what we do today, the agency model. He said, "Fine." If you remember way back, the late 1990s, early 2000s, those big portal deals you would do with old AOL. There were certain compliance issues coming in. The inside story of twin deals that created an online hotel-booking juggernaut. I've never seen a hockey stick play out, but this was a hockey stick playing out during the process. I had a meeting with a person at a company called Gullivers Travel Associates [GTA]. That's when we met. Although we at Active had just opened an office in Paris, which closed down in deference to Booking. So we did more of a pre-business plan and research than possibly we should have done in retrospect. It was just a very small building that had two floors, one toilet. USA Networks/IAC, senior vice president of strategic planning, CFO, Expedia, CEO [2005-2017], Priceline.com/Priceline Group, head of strategy and vice president corporate development, 2000-2016, Priceline Group/Booking Holdings, CEO, 2017-present, Active Hotels, European business development manager, 2003-2005, Booking.com, regional manager roles, 2006-2013, Bookingsportal, co-founder [2001-2003], Bookings.nl/Booking.com, chief marketing officer, 2004-2012, Priceline Group, CEO, 2000-2013, Priceline Group/Booking Holdings, chairman, 2012-present, Activebooking marketing materials. I had a one-and-a-half-year old son at that time and I was going to love to spend more time with him. This was before Google Maps here. You will not have to pay any periodical fee (like monthly, yearly fees) or commissions from the reservations made through the Online Booking Manager products. I think the most common way to make a hotel reservation in those days was to get a phone number from a phone book or get the phone number from a travel guide if you want to go to Paris. You make a reservation and that's it and you pay at the hotel. But to his great credit, he continued to stay very close to the market and ultimately identified Active Hotels in Cambridge as an agency model hotel business. Do you remember times in the early part of the last decade, when companies were acquiring customers in different deals with other online portals. So we didn't really have an option. He came out to Cambridge. That's why we wanted to bring in Active Hotels to have that retail, disclosed operation. In 1996 in the Netherlands, Geert-Jan Bruinsma, a recent college grad who always knew he wanted to start a business, discovered the Internet, and decided he wanted to create a hotel-booking website. Booking.com was very successful at that time in continental Europe, but not as successful in the UK. Yeah, I mean, obviously under the bonnet you never know what's happening. He didn't want all these people. Just sign up. One of the things that was very trust-building with all the discussions we had during due diligence is they did find things that you're not that happy to show them, and there was never any sense or hint that they were going to change their minds. The idea was that he would set up that they would become an affiliate for us as a way to find out more about each other. The result was Activebooking.com, which, in early 2001 after the dot-com crash, changed its name to Active Hotels. All the market research guys were telling us the future is merchant rate, or net rate. Over 100 Hotel Booking Sites. So they kind of had retreated. But Booking or any of the online travel agencies? Yeah, there was lots of contact before the transaction went through. This property was one of the first to go online with Active Hotels. There was no trust paying up-front. Geert-Jan had no clue about hotels. Online travel agencies receive a net rate from the hotel, and mark it up to determine a retail rate at which price they sell the stay to consumers. Basically, we said, OK, either these guys are nuts or we are nuts, but let's work with our customers and make the thing grow. So when Bookingsportal purchased Bookings.nl, three of us went to the PhoCusWright conference in Orlando, probably 2003, I guess. And we started going more direct to consumers and more direct to some UK sites. That, to me, would be something that is ground-shaking. - Joyce from Canada That was to enable us to have a retail hotel product in the U.S. He just wanted the technical side to flourish and go forward. So we set up a business where we would work together. At the time, we were pretty ignorant as there was no one in our team that came from the hotel industry. We made that acquisition first. And they kind of approached us then and we had a chat. That was one of the few mergers where the integration really did provide some top-line synergies. A tool named EAASY SABRE was available for CIS subscribers as a closed platform. We couldn't afford to keep them running. Active Hotels' first office was at 3 Wellington Court in Cambridge, UK. And again, that was kind of abandoned, and reintroduced many years later. At that time, to be honest, I was in my mid-to-late 20s, just a very aggressive sales guy. It wasn't that Expedia was unsuccessful in Europe. Normally it's much easier to get together a framework and to work together if there's trust involved. Whereas the British would be, "Well, you know, maybe we'll have a different look at it that way." The key differences between us, I think, were more to do with our management styles. Active Hotels, chief operating officer, 2000-2005, Booking.com, chief operating officer/consultant, 2006-2008, Stella Dunton, the proprietor of the Charlotte House Hotel, Peterborough, UK, and then-Active Hotels COO Matt Witt, hold an Alcatel Web phone around 2000 that was used to connect hoteliers to the Internet. Only Need 5 Minutes to Book Bus Tickets Online Online bus ticket booking is so much easier than what you think. So a solution had to be all-encompassing. Essentially, that's what happened; then so Glenn came over. At that time, we had already closed down that joint venture in Priceline Europe. For example, we were recruiting hotels in the same way, and on-boarding hotels in very similar ways. How can we help you? At Active, there were in Cambridge about 13 people on the team. I didn't know it was called affiliates. Active was bigger in sales and Active was bigger in profits. We realized that the distribution deal with WorldRes wasn't going to drive enough bookings. I said to Andy, "OK." So I called my wife, Amy. If you remember, in the UK, Expedia starting pushing out during 2000 and 2001. They must have spent quite a lot of money on it. The way we did the agency model was so much easier. I mean, but the great metrics, including the size of the hotel industry and the margin involved, made hotels an obvious place to focus if you're an online travel agent. Locked up in a room, they were so full of ideas. Would you order something that nobody has? We're growing really fast. At the end of the month, or the beginning of the next month, we were sending an overview with all the reservations and they had just to check those reservations — which were cancelled — and we didn't charge them for cancellations. Yeah, I'm an investment man, too, now, and you see all these hockey sticks. It was at this time when Kees Koolen [marketing director/COO of Bookings.nl/Booking.com 2001-2008] came into the picture. What stood out were the teams' intelligence and street smarts. We were really lucky to have tremendous entrepreneurs at both businesses [Active and Booking]. I'm not unhappy about saying that that's how it worked. My goal was to bring on partners for Octopustravel. Like the others, An Oral History of Travel's Greatest Acquisition, Booking.com, spotlights pioneers who refused to go along with the crowd and conventional wisdom — au contraire — and made online travel history because of their convictions and talent. BROWSE ALL DESTINATIONS. To me, it sounded very logical that hotels themselves should know the best room rate they can charge at any time. I was employee number seven. So when a hotel sold a room, it was immediately replaced. Search cheap hotels with KAYAK. Within the UK, a PC would've cost £1,000 [$2.220 adjusted for inflation]. They kind of let the local management manage. I think around that time [2003 or early 2004] we were talking to the guys at Active Hotels saying, "Hey, you guys are really good in the UK and in affiliates. I think I was known as the handbrake or Dr. No. They had an online company called Octopustravel. I think we always understood that we can't win if we're doing as good a job as Expedia does or other merchants with converting our consumers. The idea was that they would become an affiliate for us as a way to find out more about each other. Priceline Europe, which now included Active Hotels and the newly acquired Bookings B.V., "had an excellent quarter with $158 million in gross bookings and an organic growth rate of 88 percent, accelerating from 76 percent in Q3 and significantly in excess of that reported by our competitors," Boyd told investors and analysts. We believed at that time that the agency's model was preferable for consumers obviously because they don't have to pay up-front. Or slow them down. I want to say within 12 months, all the Active directors left, including the CEO Andy Phillipps, who I'm sure walked away from a ton of cash. [Priceline.com CEO] Jeff Boyd was speaking there. I think a lot of it actually started from the early days of starting the destination sites. With him was the man who's running finance; he was more of a consultant and helping them keep things together. I recall that we presented the Bookings business to Priceline and to Glenn, and it was pretty exciting. And how much do you pay, how do we get your information? Glenn Fogel is a great guy, who did all the right acquisitions when everybody did the wrong acquisitions. Malaysia’s ultimate holiday destination standing at 6,000 feet above sea level. I didn't find anything for the Netherlands, but I remember I found Hilton.com in the U.S., and this must have been July 1996. As soon as we'd been bought, among a number of things, we started talking about what's the best way to expand into Europe because that is the strategy for this to work. You'd stick it on the individual hotel's website and for every booking he got through our booking button — because again, it was very early days and these guys didn't have these tools — we'd get a 3 percent kickback. And, then they came over to see us in a big group, as well. Why do you ask?" I think that's how the whole relationship started, really. So that was interesting. But we were always going to take a percentage of the booking rather than be a merchant. So when you buy these guys [Bookings], it's going to be one class of equity afterwards and you will all be in it together. I met the CEO, Stef Noorden. I don't want to sound negative about it because it was a super time, but when Andy left, I was made managing director of Bookings.com Ltd. But the greatest acquisitions, such as Priceline's rapid-fire acquisitions of Active Hotels and Bookings, which led to putting these businesses together and rebranding them as Booking.com, gave the parent company new life and global reach. We thought, well, the only advantage here to us is the to cash flow. So I was looking for how to do this in the UK. Also within the next 12 months we had 9/11. I said, "Oh great. That was his lot. I'm not sure how long. He's the second Adrian at Active. The Online Booking Manager products are "Commission Free" systems, installed on your own server/host, so, the reservations system will be only under your control. Bangkok, 593 Hotels Visit the city of Angels. You could actually already make a reservation on Hilton.com. We ranked Priceline's acquisition of Bookings B.V. alone — even when excluding the Active Hotels transaction — as the fifth greatest deal in Internet history, surpassing Google-DoubleClick and Amazon-Zappos in terms of value creation. Yeah, of all the companies around Europe, they were the ones that worried us most. So, it took us about two to three hours into the conference where suddenly we said, "Hey, these guys are all saying that the agency model seems to be like the model of the company that we just bought." This oral history was a couple of years in the making. 1950 Hilton creates its first special amenity for female travelers – a sewing kit and booklet with helpful names and telephone numbers. They didn't give the supplier that trust, which was a culture change for us in the department. I think 60 percent of traffic came from Alta Vista and we had some local Dutch ones, some national ones. It was not long after the dot-com bubble burst. I said, "That sounds very interesting. I can't remember if there were others looking at the business at the same time. Because as a result, it took the Active team and the Booking team and forced them to act together very early on in that transaction. The main thing we're talking about is the back end. Now the focus became to integrate the two companies, which at that time had 18,000 properties combined, the largest inventory among online players in Europe. Courtesy: Matt Witt. It features an intimate street-level terrace and a restaura... History Hotel Laleli - IstBooking.com We had spoken to Expedia at some length, and we'd been in touch with Expedia for quite a long time just through meeting at conferences. I remember sitting in a meeting in London with a whole load of investors and we were looking out the window, and every second bus that went by had a Lastminute advert on it. There were cultural differences and clashes among the teams; most of the Active Hotels leadership left after a year or two. Can I come and visit?" It was right after the purchase of Active went through. We're much better on the continent and we're primarily good in SEO [search engine optimization] and SEM. Then you'll look at the menu and look at what other people are having. We just looked at each other said, "No. I actually moved from my house in London to Cambridge and lost a very good girlfriend in the process, who didn't want to move. I remember because that second round of funding was a bit painful. Neither company had any truck with brand at the time. Yeah, so I think Andy [Phillipps] had decided he wanted to try and sell the business. For example, Expedia, which was owned by InterActiveCorp, looked at both Bookings.nl and Active Hotels and, for various reasons, didn't make an offer for either. And within the Cambridge office, I still had a customer service team, I had the pay-per-click team, I had a technical team, and I had the finance team. At Active Hotels, we talked about the business model for, I'd say, the first six months. In this sense, Priceline's acquisition of Booking.com has parallels to eBay's 2002 acquisition of Paypal, which spearheaded growth by adding a then-attractive payments platform onto a plateauing e-commerce marketplace. We were expanding into the world. At the time when I interviewed with Kees, I thought OK. The numbers are phenomenal, innovation is at its best. We did a presentation to the Software Business Network, which was a loose network of entrepreneurs, angels basically, based in London. And Gullivers launched a company called OctopusTravel.com. He was the CIO. So if you wanted to stay in Liverpool, it might be on a Saturday, and you suddenly decide you want to go up there, the only rooms you were going to find were from us. See the sales conditions for the rate. It became pretty quickly obvious that Priceline Europe wasn't going to work, just like Priceline hadn't worked in the UK. When we were able to combine the business and expose that inventory to travelers from Europe who wanted to come to the UK, and UK travelers who wanted to go to Europe, then there was an instant lift in the business. We really made a factory process of that and then introduced A/B testing, and version improvements over time. The first known online booking tool was created at the beginning of the 90s, by SABRE and CIS technology provider. And so the two businesses were financially integrated from day one. Although that took a lot of involvement and a lot of involved activity, compared with many M&A transactions, it was relatively smooth. He was building databases for the chain where I was working. So I go to Amsterdam alone and I met with Stef again, his management team, and Jan. And, I think this is the greatest thing since sliced bread. There was some discussion about whether this opportunity made the most sense or not. In 2016, the ACCC found that Expedia and Booking.com (as well as their subsidiary sites) were forcing accommodation partners to provide them with the cheapest rates, via parity clauses. And that's another deal that's been a home run on the Internet: the Priceline purchase of Booking.com. I remember distinctly, I think it was in 2002, I want to say September, that we reached profitability. They also stated that hospitality is the ONLY travel sector in which OTAs are gaining share at the expense of independent hotel brands. These numbers are necessarily estimates because they are based on market caps, which constantly change, and they amount to our best calculation as to what contribution the acquired company made to the parent company's overall valuation. It made it a lot easier that if someone could show that the numbers were going to work then that kind of made the decision. But everyone deserves to be mentioned. They still do it today. At Bookingsportal, we could purchase all kind of keywords on Google and they actually had a very, very targeted destination site in the language of the customer. The owner and the vice president took over the whole thing and I just sat there smiling. The process went on. All that went out the window. Booking.com, which was called Bookings at the time, or Bookings.org, was very much a Dutch company, and not present at all in the UK. And although it was a lot of effort, both culturally and from a tech point of view, and who owns the contact of this hotel group now and all that kind of stuff, so you begin to work together. Hotel booking process design & usability Travel UCD – February 2003 What is in the report? Note: These are our best estimates of the current enterprise value of the acquired companies, and the dollar value gained. In particular, the guys at Booking.com, after the integration of the two, including Kees Koolen, Arthur Kosten, Pieter van Doorne, and Adrian Currie came from Active Hotels, really did a great job scaling the business. We discussed merging with our shareholders and I know Stef [Noorden, Bookings CEO] discussed it with theirs, as well. I think we at Active had 10 or so Ph.D's in math-based subjects. and the Dutch guys were going, "Yeah, we have to do this." Which meant that the yields through the websites were something we just focused on all day and every day. And, hats off to Glenn Fogel and team for recognizing Booking and the potential there. One of our innovations was automatic availability. Searching for a cheap hotel? We could make the process of going into a route, scale the technology, create a destination site, get the inventory, translate it, and advertise it in local languages. • An explanation of the key concepts behind online hotel booking process design, including screen flow, multi-room bookings and occupancy level issues • An analysis of the popular booking … But, there are so many people to name. Increase Revenues Thanks to Upselling. I think in retrospect that was a very smart action from Glenn, Bob, and Jeff to make that happen. And, it's a shame that only some people get their names mentioned because, as with any of these companies, there are a lot of people who don't get to have the public acclamation and acknowledgement of the hard work being put in to make these companies successful. Here's a great disrupter for you. We had closed on that deal a little bit before Active Hotels. Our timing wasn't perfect. We worked very, very well together, and Gillian's a hard worker. First World Hotel. One thing that was clear quite early is their system was newer and more capable of scaling for the future than ours. I get a little bit frustrated when people come and say Priceline acquired Bookings.nl and from that came Booking.com because Active was acquired first. That probably meant one in the U.S. for us. In addition to the interviews, which appear as excerpts and have been lightly edited for grammar, Skift collected archival materials from participants and institutions involved. Imagine we were a bunch of tech guys doing these projects, and acquired a company [when Kosten's Bookingsportal bought Bookings.nl in 2003], and we actually had quite a success growing it, but we were relatively inexperienced young guys. I was with a guy called Shane Whaley. In their own words, you can read often-never-revealed details about the formation of the companies; how they viewed the competition; the talks that led up to the deals; the sometimes-stormy interactions when British-led Active Hotels and Dutch-run Bookings team members clashed during the integration process; and how they feel about the outcome. We never really raised much VC [venture capital] finance. One advantage of booking with the hotel directly is the use of the hotel's full cancellation policy as well as not needing a deposit in most situations. Stef said, "Sure, when would you like to come?" He had contacts. There are no social clues, and mostly shopping is a very social thing like in a restaurant. And, our calculations don't even take into account Priceline's acquisition of Active Hotels, which occurred a year earlier than that of Bookings. Whenever two companies come together there's always a risk of a section winning or losing but I would say the majority — and there were some people who got burned — of people went into it willing for it to succeed on behalf of the new combined entity. Now Stef spoke many languages, like a lot, but he doesn't speak Italian. They accepted 10 of us and they did an internal academy. Earn more. That was not too successful. We didn't have the budget to go big direct-to consumers so we actually just focused on processing bookings as efficiently and effectively as possible. WorldRes was, interestingly, a bit of a competitor at the time, although they raised a ton of money, spent it all, and then disappeared. They can then receive commission payments from the hotels for any business booked on their websites. Adrian Critchlow and Adrian Currie, who's also incredible. I thought, wow, this would be a great thing to put these guys [Active Hotels and Bookings] together. There was some stuff they couldn't leave us alone on, but I think Glenn worked really well with Jeff and Bob to try and give us space to be allowed to carry on. We had at one point a discussion about shopping behavior and we had a discussion on e-commerce and it was actually not even related to Booking.com. Because of Booking.com's influence, rival Expedia Group, which now owns Expedia.com, Travelocity, Orbitz, and Wotif, had to add an option in many listings to enable travelers to wait until they arrive at the hotel to pay instead of having to prepay months in advance at the time of the booking. Wrongly in retrospect, but they were negative about it at the time. We essentially just got a big pile of books for the team that was working on the website. in Thailand "I will keep on recommending Agoda to my friends." Essentially, within two months, everything went pear-shaped. And yeah, he's one of those guys you can have in a meeting. London , 464 Hotels Discover the rich history of London. That was a bit of a challenge initially. Most of our shareholders were saying, "If you're growing that fast, even if the deal takes three to six months to execute, you've halved the value of your income while you do it because you will take your eye off the ball while you're trying to get the transaction to go through." The way we would know is we'd always get the last available room in a hotel because Expedia was charging too much commission, frankly. "Well, you can learn Italian." So that was the biggest part of my job, which was to make sure we were successful in as many countries as we could. You can't cancel anymore, that's it. I think they had probably come to the conclusion at the time that an acquisition was the right thing to do. We didn't have to have every hotel, we just had to have more than anybody else. Well, I was in Trafalgar Square with Andy Phillipps, the CEO [of Active Hotels]. Well, and another great thing. I think that was an advantage for us. I went over to Cambridge [where Active Hotels was founded and located]. It soon added a component to take direct bookings. I know probably 25 or 30 of these were reasonably credible, were getting a lot of PR, a lot of press. I would just add it's something that people should not take for granted. So yeah, we went with some of the big airlines. The founders, Andy Phillipps and Adrian Critchlow, were the two cousins. The ability to work there and all of a sudden have mobile come in and have the industry, in effect, transform again. My first job was to make sure that we earned some money so that we could start expanding. History. We had super-big debt, we had really high mortgages, and during that conference, literally all the smart people told us, "You just bought a company that is like the past. I think my job title after the acquisition was CEO of Priceline International, which sounds very grand but that was basically Priceline's non-U.S. activities, which weren't that substantial at the time. I felt I could learn a lot from it. For Booking.com, we estimated that it accounts for 85% of Booking Holdings' market cap on June 21, 2018. I know two of those guys from the Amsterdam Hotel Guide. First thing, Active Hotels was a no-name so we didn't want to go after hotel chains. I had a good jolt. And just hand it off. What happened was Andy mentioned, what did I think of Booking.com? I'm also a gay woman, which I think also helped me. Despite what some — but not all — would characterize as a stormy marriage, the pairing of Active Hotels and Bookings to create Booking.com helped create enormous value for Booking Holdings, and many of the early employees. I can't say that's an amazing, ground-moving thing there. A lot of these famous people that we knew of. 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