Do they have a significant grip on the market? I’ve never used them, but for all I know they sell a majority of plane tickets.
Then again I haven’t used Ryanair either. The reputations of Ryanair, Spirit etc are sufficient for me to avoid them. But in booking.com’s case I barely even know it exists.
> According to Booking Holdings (Booking.com)'s latest financial reports the company's current revenue (TTM ) is $22.00 B. In 2023 the company made a revenue of $21.36 B an increase over the years 2022 revenue that were of $17.09 B
Booking.com reported net income of 4.2 billion in 2023. More than American Airlines ($822 million), United ($2.6 billion) and almost as much as Delta (4.6 billion). Meanwhile Booking.com has no planes, no hotels, no rental cars, no inventory of anything, really.
Agreed, but there are more major hotel chains than major airlines, for the purposes of providing a basic comparison. And this particular article was about them and Ryanair.
What I always find interesting is middlemen businesses that don’t do any of the risky and laborious work, such as operating hotels and airlines and car rental businesses, earning higher profit margins and profits than the businesses that have to put much more on the line.
You would think the internet would especially be able to split the profit margin of these middlemen between the customer and the actual businesses that do the work by automating and commodifying the middleman’s function.
> You would think the internet would especially be able to split ...
If it isn't obvious yet, the enormous reach and scale of the internet does the exact opposite, it basically guarantees consolidation. Booking and Expedia each used to be 4 or 5 independent companies. The booking engines wield power by de-listing any operators who offer lower prices anywhere else, and none of the hotel chains can risk not appearing on the sites, even more so when there are only two.
The hotel chains can get together and offer a website showing lower prices to their rewards members.
In fact they did, called roomkey.com Hilton/ihg/marriott/hyatt/choice/wyndham options could all be searched simultaneously, and you get the lowest price and the hotels avoid paying commission to Expedia and booking.
But they shut it down. I wonder if it was because hotels are usually franchised, and the brands get a percentage of revenue as royalty, so they don’t care about commissions the hotel operators have to pay. So they decide to price discriminate via the travel agents.
It should be similarly trivial for the airlines and car rental companies to get together and offer the same website. Isn’t it better to give customers a 7% discount rather than give booking/Expedia 15%?
Obviously, reality is different so there must be a reason. I’m guessing the gains from price discrimination are more than the losses from commissions.
The most likely explanation for shutting it down was the enormous cost of driving traffic to the site. After 20+ years of habits, it's hard to tell people about a new site, let alone get them to use it regularly. And given that hotel room prices change all the time, it's difficult to even prove they have the lowest prices.
Plus it is hard to get competitors to work together on something. Orbitz was started by a partnership of airlines. It IPO'd and then was acquired by a private company, all within 3 years after launching.
https://en.m.wikipedia.org/wiki/Orbitz
That's normal. Information is a very valuable resource. It's often the case that advertising companies can be very profitable while people advertising using them have worse margins.
The information being referred to here is not scarce, though.
All airlines and hotels and car rental websites show everyone the information, at the cost of a few minutes low effort button clicking. A vast change from how difficult and time consuming it was to access information before the internet.
> The information being referred to here is not scarce, though.
>All airlines and hotels and car rental websites show everyone the information, at the cost of a few minutes low effort button clicking. A vast change from how difficult and time consuming it was to access information before the internet.
I think the difference in information is tremendous. getting 100 quotes from hotels from individual hotels websites would take many hours, and is a 5 second operation through booking.
Consider that you might do that several of times in the process of creating a booking, it might represent a dozens of hours of information collection and organization.
organization and accessibility has tremendous value to the customer.
That's probably true. I've never used them in the US but they seem to often be the site of choice in Europe and Asia (and, based on one recent experience in Europe, can have inventory that can't be accessed any other way). That said, you also have to take direct bookings into account which is most of what I (at any rate) do.
Do they have a significant grip on the market? I’ve never used them, but for all I know they sell a majority of plane tickets.
Then again I haven’t used Ryanair either. The reputations of Ryanair, Spirit etc are sufficient for me to avoid them. But in booking.com’s case I barely even know it exists.