Close to 90% of Booking Holdings’ profit comes from outside the U.S. Over the past year, the company has spent nearly $1 billion on Chinese tech companies, including ride-hailing giant Didi Chuxing Technology Co. and Meituan Dianping, whose all-in-one app lets hundreds of millions of users post restaurant reviews, buy movie tickets and book rides, food delivery or hotel rooms.
The spending adds to nearly $1.3 billion of investments that Booking previously made in its top Chinese rival, online travel agency Ctrip.com. While Ctrip is established, the Chinese startups Booking recently invested in have yet to turn a profit and are burning through cash.
CEO Glenn Fogel, 56 years old, a former investment banker who joined Priceline in 2000, is leading the firm’s push into China, the world’s largest source of tourism spending, and says the stakes it has purchased there are meant to help it gain a long-term foothold in a country where people overwhelmingly scout travel deals and book hotels and flight tickets using mobile apps.
“We believe that being part of it is very important,” Mr. Fogel said in a recent interview in Shanghai. He said that while Booking wants to make a good financial return on its investments, “we are not a financial player or a hedge fund or a private-equity firm.”
Booking is counting partly on synergies. It is hoping to set up its Booking.com customers with ground transportation arranged by Didi Chuxing, getting its booking services in front of hundreds of millions Didi users. Under another partnership, Agoda.com will sell accommodations to users of Meituan’s app. That will help Booking reach the “middle-to-lower income” Chinese tourists that complement Ctrip’s client base, according to James Lee, a research director at Mizuho Securities U.S.A.
Such partnerships also open a global door for both Didi and Meituan, which get access to Booking’s more than 1.5 million listings worldwide.
But its China holdings also complicate the landscape for Booking. The companies it has invested in are in many ways direct competitors of Booking and its units.
A spokeswoman at Ctrip said the company and Booking continue to work together by driving customers to each other’s accommodations inventory.