Since he began his tenure as Priceline CEO in January, Glenn Fogel has not shied away from being vocal about Priceline’s and his own hopes for the China outbound tourism market. This is not exactly controversial given the immense potential of growth for the China market in comparison to any other, including the United States. Nonetheless, Fogel has made it clear that substantial challenges remain, and the domestic China market will be largely inaccessible for the foreseeable future. Arguably, the biggest challenge for Priceline is Chinese competitors moving abroad, something that the company has tried to address by investing in and starting partnerships with Chinese firms like Meituan-Dianping and Ctrip.

The biggest challenge for Priceline is Chinese competitors moving abroad

A key pillar of Priceline’s business strategy for all of its platforms, like Agoda and, is the universal ease of use of its platforms across different markets. In Fogel’s words, “When you had a good experience getting a hotel in Australia through, you will want to use our services again in China.”

The biggest barrier for Priceline in China is clear: if it can’t harness domestic Chinese hotel bookings, even in a token sense, Chinese outbound tourists are less likely to utilize Agoda or Booking. Currently, this isn’t a huge roadblock. Priceline’s portfolio of accommodations globally far outstrips any Chinese firm’s own portfolio.

But that’s rapidly changing as Chinese firms reach around the world is growing. With Priceline’s lack of competitiveness in the China market domestically, outbound tourists may be more inclined to use the services of Chinese online travel agencies (OTAs) when traveling abroad as well.

Priceline’s struggles in the domestic Chinese travel market may hinder its efforts to target Chinese outbound tourists

The most obvious competitor in this regard is Ctrip. Priceline has maintained a commercial partnership with Ctrip since 2012 and invested $250 million and $500 million in Ctrip through convertible bonds in 2014 and 2015 respectively. This hasn’t stopped Ctrip from targeting some of Priceline’s core demographics, namely Western travelers.

Ctrip has pursued breaking out of its dependence on the China market through its acquisition of Scottish firm Skyscanner and the recently established, ostensibly “Ctrip for international markets.” Moreover, Ctrip’s original platform is already very usable outside of China, putting it in competition with Priceline. It’s perhaps for this reason that Priceline invested $450 million in Ctrip competitor Meituan-Dianping. Hedging its bets against a partner turned competitor may help Priceline maintain an edge in China.

Ctrip has made efforts through Skyscanner and to target non-Chinese tourists

Despite all of this, Fogel has maintained that Priceline has unique advantages that both its Chinese and Western competitors can’t match. Particularly, he cites the substantial technological capabilities of Priceline.

Due to the rapidly changing nature and size of the market in China, Fogel believes Priceline is better equipped to handle challenges than other companies. Other firms may struggle with adapting to mobile payments and a “message-driven culture.” “Rather, we see these as opportunities because companies at scale, like ours, are able to address issues with talent, technology, and capital to achieve results that other companies may not be able to accomplish.”

Glenn Fogel sees technological changes as “opportunities” for Priceline because of its wealth of experience and financial resources

Fogel also intimated in an interview in mid-2017, that niche targeting would be the long-term key to Priceline’s success. For Chinese customers, this is something that Priceline will also excel in the China market in comparison to its Western competitors. In another interview in December 2017, Fogel highlighted the company’s capabilities to collect data on its customers’ habits to leverage better service.


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