Booking.com from hotel-only provider to selling flights: a few considerations.

Hotel Distribution

I waited a bit before posting my own thoughts about it because, in full honesty, I got confused.

Apparently, many experts were just waiting for it. However, this recent move from Booking.com, actually DID surprise me. A lot!

Even more now, because Agoda is starting to offer flights too. Perhaps in a slightly different way, but hey, tomäto/tomato, what’s the difference?

Is it Good or Bad News for Hotels?

Depends.

Neither, I think, anyone should state whether it’s good or bad.

Point being, no one knows WHY BO is now going down this way.

We might assume everything we want. We can also believe everything that Priceline has said or will be saying to the public.

Personally, I don’t give a damn thing about what they officially say, that’s politics. Fair enough.

Thus, instead of trying to understand whether it’s a good or a bad thing for hotels, their distribution and their direct-booking strategy, I preferred asking myself the possible reasons behind this move.

One Step Back.

As said, I got confused.

For one simple reason: the one single thing that made BO different from its main competitor (EX) was the fact that BO used to be a hotel-only provider.

In other words, BO used to be the specialist of hotels.

It still is. But, with this move, now the shift from being specialist to being generalist is completed.

But is that really the case?

Is BO really aiming to become a copy of EX?

I strongly believe that BO is so strong because of its clear focus on hotels, of its being a specialist.

The majority of opinions I’ve heard and articles I’ve read in these days, seem to say so: BO wants to copy EX.

I personally don’t believe in this theory.

Is this really what the market demands?

Because this is the only question that matters.

  • Does BO have proofs that they are losing market share because they are not offering what the market wants (hotel rooms and flights combined)?
  • If so, which market segments want that?

We can’t refer to the market as a pool of homogeneous individuals who all want the exact same thing. And this is the exact reason why I don’t personally believe that BO wants to copy EX.

BO has a market. EX has another market.

Yes, there are many overlapping areas between the 2, yet different.

  1. Gino wants to go on vacation and prefers keeping his hotel and flight reservations separate. Why? Because Gino prefers to deal specifically with each vendor, so that it’ll be easier for him to modify or cancel the specific items of his vacation he wants to change.
  2. Pippo wants to deal with one vendor only, so that he feels safer that he doesn’t have to “connect the dots” when something goes wrong. In this case, one telephone number, one email address, one individual Pippo has to deal with. Easy-peasy.

So far, Gino is likely a target buyer for BO.

So is Pippo for EX.

What about Pino?

Pino is a bit of Pippo and a bit of Gino.

Pino would love to book everything from one place because it’s easier and faster, but at the same time he still wants to have the possibility to deal with each vendor separately, because it’s more flexible.

So, what is BO trying to achieve by offering flights?

That’s the point: no one knows.

  1. BO wants to market to Pippo? A buyer who used to be out of target before.
  2. BO wants to better market to Pino? A buyer who used to be slightly in target, but not 100% fitting into it and, therefore, also in target by EX.
  3. BO wants to prevent Gino from turning into Pippo, therefore likely moving to EX.

You see? Everything could be. That’s why I’ve found the theory of BO wants to copy EX too simplistic other than not realistic.

What if it’s just a test?

I haven’t found any specific and reliable statistics or market research that clearly states that travellers prefer to book in one place, as opposed to several sites.

And this, is even more the point and what I believe is more realistically the case: perhaps, the reason of BO offering flights, is because the want to give an answer to this question.

There is only one rule that is as sure as gravity: when you don’t know something, test it!

Without data you’re just another person with an opinion.

In this case, not a person but a business. Again, tomäto/tomato.

Think about it: travellers using BO sites who select the flight booking tab are redirected to Gotogate, where they can book flights. This is a very soft transition to an external site. Definitely not an evolution to a well-rounded online travel agency, as most sites have depicted the situation.

At least, not at this stage.

Long story short, I now feel less confused ?.