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Booking.com is reliable and a trustworthy site. It is among the chief travel companies in the world providing meta search accommodation services. Let’s just say you are planning to visit another continent and you want to find an accommodation that suits your local country taste, then simply enter the destination name in the search box of booking.com and the website will show you the best options to compensate for your detailed needs.
How commuting and travelling has changed over years
Whether you are planning a business trip, family tour, or moving out to a new country in a new land, the very first thing on your mind is always to find a suitable resort, apartment, hotel room or other forms of appropriate accommodation for your stay. In the old days, people usually travelled across countries without booking hotels in advance. But with the advent of technology, lifestyle has changed at an angle of 180 degrees compared to classic cultures. Remote stations and far off destinations are reached within hours now. Not only has technology shortened commuting hours but also revolutionised hospitality services and values.
No matter how remote is your destination point, just by one simple click on your computer these days you can already search the hotels and manage your booking online. Thousands of wide range of business companies provide such travelling services including from airline tickets to hotel reservations and transport-related assistance. Booking.com is one of these online booking sites so what makes it more reliable? That is exactly what we are going to explore in this article. More than two decades ago, a travel search service was established in Amsterdam which has become a leading tour marketplace now. Let’s have a brief overview.
Overview of Booking.com
Booking.com is among the chief travel companies in the world providing meta search accommodation services. Let’s just say you are planning to visit another continent and you want to find an accommodation that suits your local country taste, then simply enter the destination name in the search box of booking.com and the website will show you the best options to compensate for your detailed needs.
Key features of booking.com
All the hotels and their accommodation features are mentioned so that one can get a clear picture of each property and its cost. You can even filter by the property location, popular tourist attractions, travelling distances to the cultural sites, vicinity amenities, parking availability, room facilities, views and reviews. The website provides a variety of accommodation options and transportation choices to millions of travellers worldwide.
At booking.com, one can easily solve his or her travel-related issues. The website offers you to book hotel rooms, homes, business apartments, trains, flights, buses, rental cars, airport taxis, and even restaurant meals. It is convenient as a single website allows you to make all the necessary arrangements many months in advance. Moreover, the website has a plus point for business travellers as it also provides accommodation choices with free breakfast, parking, and wifi.
Although the setup was started in Dutch in the beginning, the service is available in more than 40 languages currently. The website has been marked as one of the biggest travel marketplaces by international entrepreneurs and accommodation companies. The website claims to provide more than 28 million reported accommodation listings, including over 6.2 million homes, apartments, and other unique places to stay.
History of booking.com
Necessity is the mother of invention, so it is very true when we talk about how this grand idea of the travel marketplace started in its very first place. During the last half-decade of the 20th century, Geert-Jan Bruinsma was trying to book a hotel room via Hilton.com in Amsterdam. The website was supposed to provide Hilton hotel room bookings in the United States only. At that point, the system was not sophisticated enough to allow hotel booking for people based in the Netherlands.
How it all started
This was a blessing in disguise, as Bruinsma picked the idea to create a website that can provide hotel booking to the people either visiting or living in the Netherlands. Hence, it was in 1996 when the very first pioneering sketch of to be the grand travel company originated as bookings.nl. However, Bruinsma did not have deep insights about hotel businesses and so initially, the hotels could charge a preferable price to the guests and simply pay a 5% commission to the website. The secure booking began with a slow push and the company went through countless ups and downs before it reached the present stage.
At that time the whole setup was limited to Dutch language only. In 1997, the owner of the business Mr. Geert-Jan Bruinsma had to face rejection as he contacted the famous Dutch newspaper of that time De Telegraaf to post an ad about his recently started website. The ad was not approved by the newspaper as it only posted the ads with a phone number, not with a website.
From 1997 to 2002
Bruinsma managed to handle all the promotion and marketing himself without having a partner. His business had not come to be fruitful until he affiliated his website with 2 other big hotel websites operating in Amsterdam for a 50% share on each booking. One of these websites offered bookings via email forms while the other provided an advertising page for the hotels. Introducing their links to bookings.nl proved to be very successful for the newly started free hotel booking business. Within a year, Bruinsma made enough cash to be able to hire other personnel.
By the advent of the new century in 2000, the company expanded as it merged with another company named Booking Online which was established by partners namely Cisco and Alec Behrens, Marijn Muyser and Bas Lemmens. This lead bookings.nl to be converted into booking.org initially, and the domain finally changed to booking.com with Mr. Stef Noorden as the appointed CEO of the company.
As the company advanced in business, Bruinsma hired five more employees by 2002. This was such a golden time for a newly established hotel booking company making enough capital and getting high fame not just within local communities but all over the international tourism markets. Expedia was considering buying booking.com at that time and there was talk the company is going to be sold ultimately to the high ranked travel group. The Expedia owners gave it a thorough attention and the negotiations went on for 6 months but in the end, they refused to buy it.
From 2005 onward
Three years later, a digital services travel brand called Priceline Group managed to purchase the company for $133 million. Prior to this transaction, Priceline Group had also bought another hotel reservation company Activehotels. Activehotels.com was a European hotel reservation company and was sold to Priceline Group for $161 million in Sept 2004. The owners decided to incorporate both the newly purchased companies and that proved to be the major up throw with booking.com producing more capital. In 2005, Active Hotel Limited was merged within completely and its name changed to Booking.com Limited.
Priceline Group was in a debt of $19 million in 2002, while the lucky investment of booking.com turned to flip the coin for the brand helping it earn more than $1.1 billion profit in 2011. This investment was highly cherished by different social media business pages because such a huge uplift has never been seen before in the history of any digital travel brand all over the globe. Although Priceline Group also runs other local as well as international travel companies such as Kayak.com, Agoda.com, Rentalcars.com, and others, however, booking.com proved to be the main income source for the owners. This fact is as obvious as in 2018 the parent company changed its official name from Priceline Group to Booking Holdings.
In 2011, Daren Huston took the charge as the CEO. He also served as the president of Booking Holdings from January 2014 to April 2016. His successor was Gillian Tans, who helped improve the company’s financial standing but he also resigned in 2019. Glen Fogel is the company’s present CEO.
Revenues war: Booking Holdings Vs Expedia Group
Both groups operate in the same industry via hotel booking sites and have been very close competitors. Although, their work frame has an identical basis they differ in their revenue making strategies. Booking Holdings makes its sales mostly from agency revenues whereas the Expedia Group’s resources depend upon merchant revenues. Let’s have a quick run through.
Any online travel agency working anywhere in the world has 3 revenue-generating strategies. These include:
- Agency Revenues
- Merchant Revenues
- Advertising Revenues
Let’s get a glimpse of these strategies:
Agency Revenues: These are the revenues that are provided by the party providing accommodation services to the customers. The website associates the booking links to their property, and as the travellers book a hotel room or an apartment, the hotel administration will pay a commission to the website from which the customer reached their vicinity.
Merchant Revenues: These are generated by charging a fee to the customers looking for accommodation services on the website. This is opposite to the Agency Revenue stream. It charges a certain amount for each booking to the customer other than the hotel’s room reservation fee.
Advertising Revenues: These are revenues earned from referrals, advertising placements, and subscription fees.
Booking Holdings and the Expedia Group reported revenue of more than $14 billion and $11 billion respectively in 2018. Although the Expedia group has low revenue, its gross booking value was more than Booking Holdings. The analytics reveal further that Booking Holdings made 72% of this revenue in 2018 from Agency bookings while Expedia Group obtained 27% of revenues through agency bookings. On the other hand, merchant revenues stream strengthened Expedia by providing 53% of its total profit whereas booking.com managed only 20%. The advertising revenues were found to be more or less the same for both brands.
Other Competitors of booking.com
Several online travel agencies and accommodation meta search units are up in the market with some being local and some international brands filling up the digital travel marketplace. Key competitors of booking.com excluding Expedia are listed below:
Orbitz: The brand was founded in 2000 in Chicago. The company provides travel and leisure services also including flight booking, rental cars, resorts booking, restaurants meal reservations, and tours or trips. It owns a collection of consumer brands that includes Orbitz, CheapTickets, Ebookers, and HotelClub.
TripAdvisor: TripAdvisor was founded in 2000 and is headquartered in Needham, United States. The company has more than 30 sub-offices in various countries all over the world. The company’s framework is managed by nearly 4000 employees. With more than 1 million accommodation vicinity, the company is very famous in its social media marketing having millions of followers on twitter. The gross profit figure in 2018 provided by the company was $1.5 billion.
Kayak: Kayak is another online travel assisting company founded in 2004 that focuses on helping travellers provide all the details they need before reserving any accommodation and assist them throughout their trip using different policies. Kayak also has its application other than the website. The headquarters is based in Stamford, US.
Airbnb: Airbnb is among the close competing companies claiming to have more than 7 million listed accommodation sites. It was founded in 2008 and within no time, has reached high levels in providing travel and hospitality services all over the world. The headquarters is based in San Francisco and has more than 13 thousand employees overall. The company has its affiliate hotels in more than 190 countries across the globe. In 2018, Airbnb generated revenue of $11.2 billion. The company has 1.4 million properties including various hotels, resorts, and apartments. The gross booking value reached $9.4 billion in 2019.
Trivago: Another emerging competitor for booking.com flights and respective travelling services is a company called Trivago. It is a German company operating as a search platform for travellers to find the best deals. Trivago is a public company formed in 2005 in Düsseldorf, DE. Among various cheap hotel booking sites, the company tends to ease the booking process for accommodation for guests. The estimated valuation price of the company is 133.2 million dollars.