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The State of Online Travel Agencies 2018 Part II: Supply

by Seth Borko + Skift Team - Aug 2018
Distribution
Online Travel
Travel Tech

Skift Research Take

Many online travel agencies are no longer specialists in one product, instead aiming to become one-stop shops. The platform that a booking site can offer is a key part of its competitive moat and the contours of supply at Booking Holding and Expedia vary widely from each other.

Report Overview

Skift has broken its online travel agency coverage this year into a multi-part series exploring different aspects of the business model in depth. The second part of our series, below, looks at the inventory and supplier aspect of online travel agencies in North America and Europe. The first part of the series examined the advertising spend of these same sites while a forthcoming piece will look at emerging market booking platforms.

Online booking sites have two essential competitive advantages. First, their massive scale provides them with more cash to spend on marketing and sophisticated ad-tech teams. Second, they consolidate a wide range of travel supply onto a single platform. These two strategies complement each other well. A broad travel offering allows booking sites to draw in consumers, whose commissions fund ad budgets to acquire further users, which makes the platform even more attractive to new suppliers. Rinse, wash, repeat.

While online marketing is becoming democratized, supply is as difficult as ever to wrangle up. Therefore, Skift believes one way to stand out and build a competitive moat is to be the go-to platform for anything and everything travel.

In this report we take a comprehensive look into the supply platforms of Expedia Group and Booking Holdings. We specifically focus on these two companies as they are largest online booking sites in the world, and both have publicly available filings.

Through country- and region-level analysis, we find that there remains room for both Expedia and Booking to grow accommodation supply geographically.

We also examine the shift into new product verticals. Expedia leads in hotel properties and airlines, but Booking dominates in alternative accommodations, car rentals, and restaurants. Expedia also has the relative lead in tours and activities for now.

The shift towards these new offerings brings the booking sites into highly fragmented markets. In order to digitize this inventory, we expect to see a further push into specialized business-to-business software, such as vacation rental revenue management or channel management for tours and activities.

What You'll Learn From This Report

  • A comprehensive survey of the suite of travel products offered by Booking and Expedia with respective market analyses
  • Property and room night comparisons between Expedia and Booking platforms
  • The evolution of both traditional and alternative accommodation inventory
  • Volume and economic trends in online air ticketing
  • Proprietary insights into the geographic positioning of Expedia versus Booking
  • Analysis of M&A trends with forward looking implications
  • Prospects for emerging online travel offerings such as tours and activities and restaurants

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