Summer reading – five news stories you may have missed
By cameron in Uncategorized
According to Amanda Johnson, teacher at Study.com, “Summer reading is critical to not only retain information but also to grow in knowledge and critical thinking skills”.
And, even though the study refers to children during school summer breaks, this is true for travel tech professionals as well.
In our hectic times, in fact, catching up on non-fiction (let alone novels) reading can be challenging, and this explains the success of apps such as Blinkist or Audible.
So, to save some of your precious time, here are five news stories that you may have missed, merged into a “summer article” to enjoy under your beach umbrella.
Booking.com turns into a marketplace
There has been a lot of talk around Booking.Basic, but I finally managed to put my hands on some decent information: the distribution giant, with its over 400 million monthly visits, started A / B testing on some properties, reselling highly discounted (and, usually, non-refundable) rates from third parties.
This A/B test, as is often the case, is geolocalized, so it will be fun to play a bit with VPNs and understand which rate is shown in different parts of the world.
As confirmation of the fact that the Asian market is particularly sensitive to discounts and promotions, the majority of these rates are currently fetched from Agoda or Ctrip, and then sold to the Eastern market, at least according to the first tests I ran.
The Booking decision could put a few noses out, especially for hotels that are aware of issues associated with Agoda’s “coupons”, but the strategy of Booking remains a pretty predictable one, not very different (de facto) from the one Expedia has been following for the last few years.
It remains to be seem, however, whether Booking will limit itself to reselling rates from OTAs it owns (such as Agoda) or has a strategic relationship with (Ctrip) or if it will start to pull deals outside of its realm as well.
Another interesting news, which supports my feeling that Booking.com is slowly turning into an actual marketplace, refers to BookingSuite. After the acquisitions of several tech companies in recent years (Buuteeq, HotelNinja, PriceMatch, etc.), in fact, Booking eventually opened its doors to third-party vendors and external travel tech companies. One of my usual sources (who preferred, understandably, to remain anonymous) confirmed that an Italian company will be among the first ones to connect.
…and does not invest in metasearch any longer – or does it?
As you may have heard, the group bought the Australian metasearch HotelsCombined, which will operate under the Kayak brand. The price has not been disclosed, but speculations have been made around 250-300 million dollars. Although it is not an economically overly-burdensome transaction for the group formerly known as Priceline, when I heard about the news, I was not 100% sure about the motivations behind it.
Booking Holdings, in fact, already owns several metasearch engines: Mundi, Momondo, CheapFlights and, especially, Kayak, which (alone) generates eight times the traffic of HotelsCombined according to SimilarWeb.
So, why acquire a similar (though minor) metasearch engine?
The motivation may lie in HotelsCombined underlying technology, more suited to hotels than Kayak’s. Furthermore, Booking may have considered it easier to buy a new metasearch rather than to increase its investments in markets where Kayak is not particularly strong.
Booking could (and most likely will), therefore, give HotelsCombined the “Mundi treatment” by exploiting the local presence of metasearch simply to resell Kayak’s inventory, expanding its presence in Asia and Pacific markets via an (overall modest) investment.
Given the recent marketplace direction Booking.com started to follow, another reason may be the increase of affiliates coming from the acquisition. The vast majority of Hotelscombined’s turnover, in fact, comes from third-parties or affiliates: almost 20,000, according to data provided by HotelsCombined, a number that’s really inviting for Booking.com.
So, it looks as if Booking continues to focus on metasearch engines, or at least the ones it owns! It is no mystery that the group has significantly reduced its spend on rival engines – specifically Trivago. In 2016, in fact, the budget allocated by Booking contributed to approximately half of Trivago’s global turnover, which fell to 1/3 in 2017, casting a cloud over the future of the business. Its recent Q2 2108 results revealed cuts in its own ad budget, and headcount losses (confirmed to me by a source within the company), in order to fight the over 40 million euro of loss in the first six months of 2018 alone.
The lion sleeps tonight – Amazon, Facebook and the travel space
According to an intriguing study released by OAG on Americans’ online travel habits, 44% of those interviewed would happily book a trip on Amazon.com if the company offered a dedicated service. To put things in perspective: Facebook gets less than 15% preference.
This reinforces my (personal, but pretty much shared in the industry) opinion on who (if any) could be the disruptor able to compete against Booking, Expedia and Google in the travel space.
Although, as you may remember, Amazon’s 2015 foray into travel was abandoned quite quickly, it remains a name that the behemoths of travel keep an eye on closely, with a mixture of respect and worry.
Google merges Adwords and HPA on its new advertising platform
During the recent Live Marketing, Google announced that Hotel Ads will become part of the new-and-now-live Ads platform. HPA will be available in open beta by the end of the year. This integration opens interesting scenarios for all those web agencies that, at the moment, are required to work on two different platforms. The icing on the cake is the creation of a specific support center for hotels, to help them optimize their HPA campaigns, as it already happens with Adwords.
It is not clear, however, if the feature will be only available to partner agencies or to end users (hotels) as well. If so, this could decree herald the end of the dependence of hotels to third-parties (such as web agencies and booking engine vendors), as these properties could, theoretically, manage the entire suite of advertising independently from a single, simple extranet.
This news comes along with other important updates in Adwords, such as the ability to create “promo extensions” and target users by “life events” (wedding, graduation and moving, at least for now) à-la-Facebook, to increase campaigns’ pertinence and ROI.
Do not hate Expedia packages
According to recently published data by Expedia, in fact, ADR for package reservations is 30% higher than room-only, showing a significantly longer booking window and a four times lower cancellation rate.
In a market dominated by increasingly shorter booking windows and higher cancellation rates (a study by Mirai shows a striking 40% cancellation rate on Booking.com), and in which forecasting becomes more and more complex, focusing on package room distribution could help revenue managers to take more balanced and far-sighted decisions.
2018 continues to reserve a lot of surprises and it confirms itself as a particularly interesting year for hotels. These summer news are yet another proof. What will the next six months have in store for our industry? Hard to predict. But, while we wait, let’s enjoy one of the hottest summers of the century because, as a one-hit wonder from the 1990’s taught us, the summer is, after all, magic.