Like Uber in the ride-hailing business and Venmo in the personal payments business, Airbnb is still leading the industry for alternative vacation rentals.
However, that industry has grown big enough to attract the attention of some online travel agency incumbents. Priceline Group Inc., in particular, is looking to position its Booking.com platform as the de facto Airbnb alternative.
While bookings in its nontraditional category are growing at a steady clip, Priceline President and CEO Glenn Fogel said during a March 15 investor conference that the company still has a big opportunity in marketing and brand recognition to truly compete with Airbnb.
In the fourth quarter of 2016 the company reported room-night growth of 31%, a record for the company, and projected between 20% and 25% room-night bookings growth in the first quarter. Alternative bookings inventory grew to 7.8 million bookable units out of about 25 million total bookable rooms, according to comments made during the company's earnings call.
On the actual number of room nights booked in the alternative category, Fogel declined to provide an exact figure. The most recent quote was from the second quarter of 2015 when the company said the category comprised 13% of bookings, an analyst pointed out during the investor conference.
While growth in the alternative category does support the company's overall financial performance, providing another opportunity to expand as its traditional bookings category matures, there is more than just money at stake, the executives said. The more categories Priceline can cover, the more dedicated to the platform its customers might be. By offering a variety of property types on one platform, Priceline hopes it can win share from narrowly focused competition like Airbnb.
"Part of the reason to do it is not necessarily just for the bottom-line benefit, which is nice and good and you want it to be profitable, but it has got to also be something that builds that loyalty," Fogel said.