Social media is either overhyped, underhyped, or somewhere in the middle

Across two conferences two sets of travel executives have highlighted the challenges in figuring out how much to invest in social media for online travel companies. At last year's PhoCusWright Steve Hafner of Kayak called social media "overhyped". A session or two later former Expedia CEO Rich Barton called it "underhyped". At this year's No Vacancy Glenn Fogel of Priceline called social media experts "charlatans" while Toga Hospitality CEO Rachel Argaman said the future of the internet was pages inside Facebook. Meanwhile Wotif provided the perfect case study to test this debate by launching $11 rooms for 11 minutes via social media.

In my latest Tnooz post I discuss this debate and look in depth at the Wotif promotion. Check out the story here.

BOOT will be at No Vacancy in Sydney March 23

The BOOT will be joining hundreds at the No Vacancy Conference in Sydney on March 23 (Dockside, Darling Harbour).

Speakers I am looking forward to include:

• Glenn Fogel of Priceline.com;
• Rachel Argaman of Toga;
• Simon McGrath of Accor APAC;
• Justin Butterworth of Occupancy and (separately) Kirsty Shaw of Stayz; and
• An OTA panel with Johan Svanstrom of Hotels.com, Robbie Cooke of Wotif and John Feenaghty of Quickbeds.com.

UPDATE - note after the Fairfax and Occupancy deal, Justin and Kirsty will be replaced David Anderson (MD Transaction Division of Fairfax Division)

Full list of speakers here.

Tickets still available here. 200 have already signed up to join (list of attendees as at March 7 here). Let me know if you are going to be there.

Agoda 2010 turnover ~$500mm. Combined Booking and Agoda doing $780mm per year

Back in March I shared with you a report from Citigroup which (at the time) gave us the only real insight into the turnover of Priceline's Agoda. That report estimated the 2009 gross bookings for Agoda to have been US$244mm. Citi projected that 2010 gross bookings would be US$433mm

Previous efforts to trawl for comments or numbers about Agoda in earnings release transcripts resulted in very little (see here and here).

At the Q3 earnings release (see seeking:alpha transcript here) Priceline CEO Jeff Boyd had a lot more to say about the performance of Agoda. He told the meeting the the combined turnover of Booking.com and Agoda in AsiaPacifc was ~U$780m for the 12 months to 30 September. His exact quote was

I want to provide on a one-time basis some data on our progress in new markets to help size their contribution to our international results. Booking.com and Agoda have made excellent progress in building the Group’s business in the Asia Pacific region. The combined business of Agoda plus Booking.com’s business for APAC destinations was approximately $780 million for the 12 months ended September 30, and the third quarter gross rate for that business was just shy of a 150%.

Note - that is the combined turnover, not Agoda on it's own. He went on to say that

Agoda continues to build its business in the Asian region and again reported triple digit year-over-year growth in gross bookings, contributing to the overall international and merchant growth we are reporting. The business has performed well following civil unrest in Thailand and is well positioned for its seasonally important fourth quarter

Also note that in the Q&A section CFO Dan Finnegan stated that there was not real difference in the numbers/turnover from a point of sale or destination basis he said

the point-of-sales businesses [for APAC] is a comparable size and growing in impressive rates. And when you think about the Asian business to the extent that includes business for Agoda, that’s it’s whole business which is point-of-sale Agoda business. Most of that is Asian but it’s the whole business.

If we match the three data points of Citi's estimate for 2009 results, Boyd on the combined Agoda and Booking number and Boyd on Agoda's growth rates then it looks like Agoda is on track for closer to a $500mm 2010 turnover level rather than the Citi estimated $433.

In a separate note we also read that Agoda CEO Michael Kenny was leaving the business to be replaced by Robert Rosenstein (the current COO). I presume (though don't know for sure) that his departure is connected to the fact that November marks the third anniversary of the purchase of Agoda by Priceline and therefore the end of the earn out period.

With the earn out over we can likely expect to see much greater levels of integration between Booking and Agoda (first pieces seen here in January).

Like to know more? Check out the full earnings transcript on seeking:alpaha or Dennis Schaal's recent post at Tnooz

Agoda in Priceline Q1 2010 earnings call

I have to let the stalker in me control the blog every now and then. Hence my continued series of posts where I look through the Priceline earnings announcements to find mentions and information on their Agoda subsidiary. The Agoda turnover information void was substantially filled by a recent Citigroup report but I am still interested in the (tiny) pieces of information I can gather on Agoda's performance.

Two things I am keeping an ear/eye out for in Agoda/Priceline announcements/transcripts (thanks to Morning Star for the Q1 2010 transcript). Firstly general information on performance and secondly anything on integration of inventory between the three models (opaque of Priceline, negotiated retail of Booking.com and merchant of Agoda). Here is what the transcript has on those questions.

On performance

On general performance CEO Jeffrey Boyd made a number of positive comments on Agoda’s performance. Saying that Agoda and year on year improvements in ADR were strong contributors to the 73% increase in international gross bookings growth (on a local currency basis). Agoda’s growth now seems to be having enough of an impact to shift the overall retail/merchant model mix. In this area Boyd said.

"Merchant gross bookings increased 25% as merchant hotel gross bookings both at priceline and Agoda offset year-over-year decreases in opaque airline ticket and rental car sales, where reduced industry capacity squeezed inventory available for opaque discounting."

But the future is not without challenge or risk – as we should expect for a business based in Thailand. As Boyd observed

"...civil unrest has reemerged in Thailand, severely disrupting certain sections of Bangkok and forcing Agoda’s team to relocate to temporary offices. As a result, business for Bangkok and other Thai destinations is under pressure for both Agoda and Booking.com. Nevertheless, both businesses continue to grow their overall Asian pacific businesses at impressive rates."

During the Q&A Mark Mahaney of Citigroup (author of the Agoda turnover report). Asked Boyd to give some more details on the Asian business. Here is the exchange edited to focus only on the Asia elements:

“Mahaney: ...could you comment a little bit more on the Asia business, particularly the Agoda asset? In the past, you’ve said that’s been growing close to triple digits year-over-year. Were the disruptions in the March quarter significant enough to take that growth rate materially below that level?

Boyd: With respect to Asia and Agoda... the disruptions had a very significant impact on business for Bangkok and Thai destinations. And while I don’t want to give a specific growth rate for Agoda, their business notwithstanding those disruptions are still growing at a faster rate than our overall business ...I’ll also add that the Booking.com business is growing, again..at impressive rates in Asia. So, Thailand is certainly having an impact, but the business is diverse within the region and the region is having very strong growth for us just in general”

On Inventory integration

He was then asked about the integration of inventory between the different brands. Boyd is still not giving away much here. It is clear that we have seen and can expect to see Booking and Agoda inventory appear on both sites but is not clear from his comments whether we can expect to see merchant and negotiated retail seamlessly integrated in the way that Expedia has started to do with its merchant and Venere backed Expedia “EasyManage” hotels. Here is that exchange (edited for focus on integration).

"James Cakmak - Sidoti & Company: Can you talk about the progress made on sharing supply inventory across your multiple brands and sites?

Boyd: With respect to sharing supply, we now have on priceline.com, Booking.com inventory available not only in Europe, but also in North America and Agoda has been selling for several quarters inventory of Booking.com to its customers in Asia. I think that we’ve made very good progress in getting that integration up and running, and we believe it’s been additive to the business. The next phase of that is really one of optimization to make sure that we’re able to display the inventory in a way that is additive to the Group as a whole and understand the relationships between how various inventory performs in different marketing channels. It’s not a trivial exercise, but in our view we’ve got plenty of time to get it just right, because as we optimize over time it will be beneficial to our results. So we’re encouraged by our progress on that front, but there is plenty of work left to do in that regard.”