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Over the years, the tourism industry has experienced a continued growth and increasing diversification and has emerged as one of the largest economic sectors in the world. Today, the business volume of the tourism industry is at par with that of oil export, automobiles, and food products. The global tourism industry is projected to continue growing and maintain its position as a key player in international business and a provider of income and employment opportunities for many countries (UNWTO, 2014). Priceline Group is one of the leading multinational companies in the global tourism industry. The company provides a wide range of online travel services through its major brands in over 200 countries.
Priceline Group was incorporated in 1997 as an online travel site known as priceline.com. It used its popular pricing strategy called Name Your Own Price. In 1999, the company launched an initial public offering on NASDAQ. Priceline Group IPO was oversubscribed, which culminated in the company’s market value soaring to $9.8billion, a record first-day value for a company at that time (Schmidt, 2015). In 2014, the company changed its name to Priceline Group Inc. from priceline.com (Yahoo Finance, 2016).
Today, Priceline Group offers online travel and hotel reservation and incidental services. It operates several websites, including Booking.com, which offers online accommodation booking services, and priceline.com, which provides restaurant, vehicle rental, and airline ticket booking services in addition to vacation packages and cruises via its Express Deals and Name Your Own Price travel services (Yahoo Finance, 2016). The company also operates Agoda.com, a virtual accommodation booking, and rentalcars.com, which provides car booking services to customers in over 200 countries in South America, North America, Africa, Europe, Middle-East, and Asia-Pacific region. Furthermore, Priceline Group offers mobile applications that enable customers to simultaneously compare airline tickets and hotel reservation information from other companies’ websites. Priceline Group has also ventured the hotel retail industry through acquiring stakes in firms in the hotel industry (Yahoo Finance, 2016).
Headquarters, Satellite Locations, Franchises, and Corporate Officers
Priceline Group’s headquarters is located in Norwalk, Connecticut, United States. As a part of its strategic plan, the company has expanded its presence in 220 countries in the United States, Europe, and other continents where it offers assorted travel and tourism related services (Priceline Group, 2016). Darren Huston is the conglomerate’s chief executive officer. Other executive members include Daniel J. Finnegan, chief finance officer; Peter J. Millones, executive vice president; Christopher L. Jvodich, chairman and director of the group; and Glenn D. Fogel, the head of the global strategy and planning (Yahoo Finance, 2016).
Branding and Marketing
Priceline Group’s stock is traded on NASDAQ under the symbol PCLN.
Companies acknowledge that they cannot reach all customers in the large, wide, and diverse markets. They, therefore, need to identify the target markets that they can serve most profitably. This decision requires an in-depth understanding of the behavior of the consumer and careful strategic thinking about the uniqueness and distinctiveness of each prospective target market. Identification and unique satisfaction of the appropriate market segment are pivotal to marketing success (Kotler & Keller, 2016). Priceline Group divides its market principally on demographic and geographic bases. With regard to demographic segmentation, Priceline Group’s target market is the affluent, high-income population that esteems high-value accommodation and traveling services. In this respect, Priceline Group partners with high-end hotels and travel companies through its online platforms to provide a wide range of tourism and travel related services such as accommodation reservation and car rental (Yahoo Finance, 2016).
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Geographically, Priceline Group divides its target market on the basis of country-specific factors, and some services are offered only in particular countries. Two broad target markets include international and the United States markets. Services offered in the international market include retail price-disclosed worldwide hotel service through the agoda.com and Booking.com brands (Priceline Group, 2016). The company works with independently owned hotels all over the world to provide reservations on its various websites. The United States market receives most Priceline Group’s service offerings. They include hotel room reservation, retail rental car services, airline ticket booking services, vacation packages, cruise trips, travel insurance, and destination services such as parking, ground transfers, tours, and event tickets among other services available at the customers’ travel destination (Priceline Group, 2016).
Priceline Group leverages aggressive marketing and promotional campaigns to create widely used and recognized brands. The company uses both offline and online advertising media to achieve the aforementioned objectives. In 2014, the aggregate online advertising costs were estimated at $2.4 billion, a significant percentage of which was incurred internationally through Google and other major search engines (Priceline Group, 2016).
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Businesses under the Corporate Umbrella
Priceline Group has in the recent years adopted an expansion strategy that entails the full or partial acquisition of major hotel and travel companies. Priceline Group owns several online based firms. Open Table and Kayak lead the pack (Yahoo Finance, 2016). In addition, Priceline Group has a stake in Ctrip and Hotel Urbano, which is a Brazil online-based travel agency (Priceline Group, 2016). By acquiring competitors, either fully or partially, Priceline Group can retain control of prices in the online travel agency market segment.
Priceline Group provides diverse job opportunities across its global brands. Some of the job opportunities available include a customer service assistant, sales assistant, supervisor, specialist sales assistant, and a collection of job opportunities in marketing, information technology, finance, and human resources (Priceline Group, 2016). Working with Priceline Group confers several travel benefits to employees (Priceline Group, 2016). Workers receive an opportunity to travel across the globe and experience interaction with diverse nationalities and employees of all occupations. The inclusive kind of environment constituted by the diversity of the workforce enhances innovation, creativity, and collaboration skills (Priceline Group, 2016).
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Priceline Group is among the key players in the world travel and tourism industry. It is a leader in the worldwide provision of online travel reservation and information search services in the online travel agency market segment. In 2014, the company had an estimated 31% market share (Forbes, 2014). Despite having an innovative business model, the company faces competition from Expedia, Ctrip, TripAdvisor, and Travelzoo which operate in the same market segment (Schmidt, 2014). Expedia is Priceline’s major direct competitor, with an estimated market share of 40% (Forbes, 2014).
Priceline Group’s biggest service offerings are online based. In this regard, the company’s operational activities render minimal impacts to the ecology and other environmental aspects. Nevertheless, the chain of partners in the company’s business model, including travel and hotel companies, impacts the ecology in terms of the inputs used in the delivery of products and services.
Priceline has seen a robust growth in revenue in the recent years after the end of the 2008-2009 financial crisis. In 2015, the company generated 9.22 billion dollars in revenue from its worldwide business in comparison to 8.4 billion made in 2014. Net income grew to $2.5 billion in 2015 from 2.4 billion in 2014 (Yahoo Finance, 2016). Most of this revenue came from the company’s hotel booking service, which is its key revenue driver (Yahoo Finance, 2016).
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Though the company enjoys a big market share in the online travel agency segment, the industry is approaching saturation, particularly in the United States and Europe where the company draws a significant part of its revenue. This is attributed to new market entrants and the expansion of the current market players (Schmidt, 2015). Priceline is a quality business which has a high potential for growth, according to analyst opinions. The company enjoys several competitive advantages, especially dealing with trends in the industry, because it is a pioneer in the online travel industry business model (Schmidt, 2015). The company can bolster its growth through a continued acquisition of strategic assets, a move that would culminate in an increase in market share (Schmidt, 2015). Priceline Group should further secure its growth by shifting its focus on expanding in other international markets such as South America, Africa, and China which is largely untouched (Schmidt, 2015).
Most travel and tourism companies are increasing their investments in offering sustainable travel services and other luxuries as they seek to minimize adverse environmental impacts. Through its main Booking.com business segment, Priceline provides a combination of luxury and sustainability through a well-booked accommodation. Other than encouraging going green in all its business segments and strategic alliances, Priceline assists in the support and retention of local environments, cultures, and economies while traveling (Priceline Group, 2016). Through its more than 67000 properties located globally, the company offers environmentally conscious services. For example, by providing guests with a platform to reserve accommodation in hotels that offer cotton sheets, cleaned with water heated by the energy generated by the hotel, Priceline encourages the adoption of sustainable traveling and tourism (Priceline Group, 2016).
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The tourism industry is one of the rapidly growing industries in the world. With millions of people arriving in a country for tourism, the industry is projected to retain the growth trend. Priceline Group is a key player in the global tourism industry. Through its websites, the company provides a wide range of worldwide online travel and accommodation reservation services. The company faces intense competition from Expedia and other travel and tourism-based companies. It can tap into the largely unexploited markets in South America, Africa, Middle East, and China.