Tuesday 20 September 2011

Booking.com - Tell Us Something We Didn't Know...

According to Investor website Priceline the company behind Booking.com have shown an International sales surge of "90% to $612.9 million. Gross bookings, or the value of all travel services booked by customers, popped 70% to $5.8 billion. International gross bookings rose 98%. U.S. gross bookings grew 13%."

According to the report Booking.com has enjoyed the strongest showing in Europe, where it boasts the biggest supply of hotels online on the continent, says Susquehanna Financial Group analyst Herman Leung he also then continued to say that Priceline's dominant supply position in Europe has helped it stifle competition.

The word stifle was the analysits choice of phrase in the initial article and not added by us! We wouldn't dare to suggest that the strategy of bidding for hotels own names on Google Adwords would ever stifle competition nor lead to switch selling buyers from going direct to buying through Booking.com. We would suggest however that it increases the cost to the individual hotels if they wish to secure their own brand and leads to less direct traffic for them.

An extranal analyist, Wedbush Securities Edward Woo, comments further, "The reason why Booking.com is the preferred site is it has a lot more (inventory) of all the hotels, while others have a smaller percentage of hotels," adds

Booking.com also has a savvy search engine marketing team, says Leung, which has been able to leverage its dominant supply position in Europe to buy a larger and more targeted set of keywords for the hotels Google (GOOG) users may be targeting. See above!

Amazing growth figures for sure but which part of the industry is really paying for it all?


Anonymous said...

Interesting stats from booking.com. Very difficult to try and break out %sales for Scotland but I hope visitscotland have at least tried to establish the value of business coming to Scotland via this and many similar sales sites. With over 1200 accommodation providers shown on booking.com, and 53 filter options covering star rating; type, facilities, theme, chains it is difficult to see, if not impossilbe, why hard earned tax £s should be spent trying to breath life into the dead duck that is/was VS.com.

Anonymous said...

Just except Google controls the way people search, NOT PEOPLE.

Sounds very "big brother" but the reality is very close. Google is now working on presenting search results based on your own search history. This would mean that two people sitting in the same office searching for the same thing could be given different answers to their search request.

Anonymous said...

Lets have some real guidance offered to the industry on this, not just from people with self interest.

Admin said...

Define self interest? Doesn't everyone have a self interest just sometimes common interest outweighs it. Have a read at the copy below today from HotelMarketing.com and then tell us what guidance you'd like!

The self-serving arguments put forward by the OTAs are just that. Rightfully so, these OTAs are businesses designed to build their own corporate revenue, like any other well-oiled organization. The power of their marketing programs can outgun even the largest hotel chain.

Let's call it what it is:

- OTA customers are NOT your customers. You do not have them on your database for repeat marketing opportunities, and they are not a part of your loyalty marketing program. The motivation and drive for customers to choose your property through an OTA may not be the same as those for someone who came directly through your website, a traditional travel agency recommendation, or word of mouth referral. OTA consumers most probably have less loyalty to you and a different set of expectations.

- OTA commissions are high. Traditional travel agents are generally 10%, while OTAs are often 25-30%. In days where every dollar is precious, this commission level is an important consideration, especially for independent hotels where there's no corporate backbone to lean against. As well, you cannot equate marketing fees levied by a chain/flag to this, as chains give back to the individual property through extensive branding campaigns, compounded over years of marketing activities.

- OTAs level the playing field. More than that, they scorch the earth! All that work you did in branding and creating points of differentiation for your property go by the wayside. Your hotel's display within the OTA site is compressed into the exact same physical space as everyone else on the site. Our brains don't process text the same way we do color photography and themed menu displays (like what appears on a hotel's own website). As such, there's not enough visual distinction for customers to remember or differentiate your property versus the next one on the list.

- OTAs' primary goal is to secure reservations. The hotel a consumer selects is not really their primary concern. It's a large-scale volume business, whether your boutique property is selling or not. They want your inventory - even at a higher price - so that they can sell rooms and hotel-air packages. That's how they make their money. Anytime a consumer clicks through and books through a hotel website, it counts as a loss to them. In fact, everything about the OTAs' websites is designed to motivate you to book through them.

- OTAs are still all about price. Despite what might be stated to the contrary, the OTAs generate customers primarily on the basis of providing the broadest distribution at the lowest price. Just look at most OTAs advertising strategies: they focus on offering the customer the best price, not necessarily the best travel experience, which is what should be touted by your property.