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Priceline acquires OpenTable as competition heats up for online engagementBy
Priceline’s $2.6 billion deal to acquire online restaurant reservation service OpenTable is the latest example of how Internet travel services are looking for a competitive advantage as mobile bookings continue to grow.
OpenTable will give Priceline entry into restaurant marketing services while giving users a reason to engage more frequently throughout their travel experiences as they search for where to dine out during a trip. At the same time, Priceline will look to accelerate OpenTable’s global expansion and increase the value offered to its restaurant partners.
Travelers use mobile devises a lot,” said Ian Magnani, partner at Magnani Caruso Dutton. “For travel companies to succeed they need to steadily increase their offerings for mobile customers, and continue to evolve their offerings to take advantage of the capabilities of the device and the context in which they are used.
“People eat more than they travel, so the acquisition should help to increase customers’ engagement with Priceline on a more frequent basis,” he said.
“Priceline could also extend their “name your price” model to restaurant reservations in a compelling way – you want a reservation at ABC Kitchen on Friday night at 7pm? Maybe a $100 offer would get you a table where one wasn’t previously available.”
Mr. Magnani is not affiliated with Priceline or OpenTable and spoke based on his experience.
Priceline did not respond to press inquiries.
OpenTable, which helps users discover and book a tablet at restaurants, seats more than 15 million diners per month across more than 31,000 restaurants.
The brand’s mobile solutions were introduced in 2008 and have since seated more than 125 million diners worldwide.
Priceline will focus on integrating OpenTable so it can enhance the end-to-end experience for each brand’s customers across desktop and mobile.
OpenTable’s mobile app
The travel experience
The deal is the latest example of how Priceline is aggressively extending its reach throughout the travel experience.
In January, Priceline inked a deal with General Motors’ Chevrolet that opens up a new area of mobile commerce for the online travel agency within a car (see story).
In February, Priceline.com launched the newest version of its Android application that was designed specifically for the operating system (see story).
In March, Priceline began testing new options for when consumers book a flight or hotel room via mobile, including displaying Routehappy scores within its app and relevant nearby hotel listings (see story).
Priceline’s tablet experience
OpenTable will continue to be headquartered in San Francisco, CA and will operate as an independent business led by its current management team within The Priceline Group.
“When you are booking travel, hotels or vacations on Priceline, it is not a stretch to see them also offer restaurant reservations that can be booked at the same time — it is a natural extension of their core product offering,” Mr. Magnani said.
“The fact that you would be able to manage all aspects of your travel, including eating through Priceline is compelling,” he said. “The fact that you can do it on a mobile phone is great, but I don’t think enhancing mobile was a primary objective behind the acquisition.”
Chantal Tode is associate editor on Mobile Commerce Daily, New York
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