Pando

With the Booking Now app, Booking.com (aka Goliath) just arrived to the last-minute hotel game

By Michael Carney , written on January 15, 2015

From The News Desk

Look at the most popular mobile apps today and they almost certainly share one of two characteristics: extreme ease of use and high levels of personalization. It’s true of Uber, Snapchat, Instagram, Tinder, Postmates, Wish, and on, and on. Booking.com, the world’s largest accommodation site, is taking cues from these consumer favorites and looking to shake-up the last minute travel booking experience.

The Priceline Group subsidiary launched a new app today called Booking Now aimed at travelers booking accommodations within 48 hours or less of their first night of stay. In this way, the company is clearly going after HotelTonight, the five-year-old, mobile-first startup which pioneered the last-minute concept. But where Booking Now looks to differentiate is through the sheer breadth of its massive network – covering some 585,000 hotels in 200 countries globally – and a new Amazon-like recommendation and one-click booking experience.

“What we’ve noticed, looking at our data, is that of the reservations made within the last 48 hours, almost 50 percent of all bookings come from phones, not even tablets,” says Booking.com CEO Darren Huston. “These are people who are stuck in airport, just saw a show, or had a late meal and decided to stay in city, or millennials traveling unplanned. We looked at Uber. We looked at Tinder. We studied these experiences deeply, and we architected Booking Now to address the spontaneous use case.”

Booking Now won’t replace the existing Bookings.com mobile app. Rather, this is a separate, stand-alone product aimed at a specific use case. The app is available today for iOS only, but an Android version will be coming in Q2.

“We believe that the last minute booking is a fundamentally different use case than advanced booking and for that reason has to be an entirely different product,” Huston says. “The demand within 48 hours is more instantaneous and very different than longer term. You’re already at the bottom of the funnel at that point, and you just need a place nearby at your price point. We’re always trying to remove friction, but that’s especially important in this instance.”

Booking Now asks the user to input just a few simple preference details for use in filtering the available options. The first is desired price range, selecting from one of five categories ranging from Premium to Budget. Users then choose the number of guests, but are only given the options for one or two – Huston says that families rarely if ever travel without firmly established plans. Finally, the app asks for “must-have” amenities like free WiFi, breakfast, and parking. These can be done once and are saved as default preferences for future searches (until changed by the user), which when combined with stored payment credentials, makes subsequent bookings even faster.

With this information submitted, the experience of using Booking.com resembles Tinder in that just a single recommendation or match is presented at a time. The app looks to serve the user with the best possible match given the above criteria and her real-time location. And, thanks to the use of predictive analytics and machine learning, the more a user uses the app, the better and more personalized the recommendations become. The user sees the hotel name, the rating (based on Booking.com’s 40 million verified guest reviews), the price, the percent match, and the location on a map. A single click on the “ready to book” button completes the reservation.

“One thing that really surprised us is the fact that last minute accommodation bookers know that when they’re standing in the street looking at one of ten options for nearby hotels for that night, they hold the power,” Huston says. “The second you walk into that lobby and ask about the price, you’ve lost all the power. With Booking Now, we’re helping consumers take the maximum advantage of that position over the largest possible network of hotels around the world.”

While HotelTonight may be great in New York, San Francisco, and London, Booking Now is great not only in these major markets, but also in off the beaten path areas like Des Moines, Iowa, or Chester, England. And with proprietary rates at many hotels and a low-price guarantee, the consumer can be confident that the app is competitive as well. And thanks to its relationship to Booking.com, the app can boast things like 24/7 live customer support, something that few consumer mobile companies will offer.

With all the things that Booking Now has done right, there’s one thing that could be improved to make it even better. While the user will only be asked to input their payment once, they must do so manually, without the benefit of a photo-based input method, or any tie-in to an existing wallet platform like Apple Pay, PayPal, or Venmo. It’s a strange omission for the company that claims to be focused on reducing friction. Payment input is one of the biggest sources of abandonment in mobile commerce and something that developers are religious about optimizing. But given that this is a one-time thing and credentials can be stored for future use – security concerns not-withstanding – this may not prove to be a major issue.

At the end of the day, Booking Now’s slick user interface and a low friction consumer experience are welcome improvements to the traditional hotel booking experience. But at the same time, these are becoming table stakes in today’s mobile-first world. Booking.com and other companies need to deliver them, simply to remain relevant. In this case, 18-year-old Booking.com has proven the innovative design is not something limited to small, venture-backed startups.

But once that’s established, where Booking Now stands out relative to HotelTonight and any other startup competitors is in its sheer scale. HotelTonight may have raised $80.7 million in venture capital, but Booking.com is the largest ecommerce company ever to come out of Europe – it has since gone global – and today makes up 85 percent of the revenue of Priceline Group, which has a $53 billion market cap.

This is one case where being the (not-so-)lumbering 800 pound gorilla in the category is a massive advantage. Where HotelTonight, Stayful, and others might support a handful of hotels in a major market and one or none in a small town, Booking Now often supports dozens. Add in the big-company resources and levels of service, and this could quickly become the preferred way for many millennials and their spontaneous traveler ilk to make hotel reservations.