TRAVEL INDUSTRY BIG COMPETITION ONLINE

OTA 20%  in All Worlds, where as OTA is 50% in the UK + America.

  1. Expedia: Generated more than $500 million in revenue in the first quarter, a 35 % jump year over year. Part of Expedia Inc.’s growth strategy is to scale the business, drive down costs, and to trim margins to attract new hotels in emerging markets. Reducing margins also convinces existing hotel customers to provide Expedia with better inventory. The way to accelerate room night growth is to increase traffic, boost conversion, accelerate bookings from repeat visitors, and “then rinse and repeat.  Expedia spends around 2.4 billion on Marketing.  Their competitive advantage is that use an opaque system and have a prestige in the mind of the customer.  Elong is the major resource for getting Expedia Jobs.
    1. Hotwire
    2. Travelocity
    3. Orbitz: OTA
    4. Lending Tree
    5. Hotels.com
    6. Ticketmaster
    7. Trivago
    8. Egencia
    9. Venere
    10. Tripadvisor: Book/Trip: Use heavily Google for PPC AND SEM; Expedia’s advertising and media businesses. Compare prices book hotels (online travel agency). 70% of tripadvisor is negative Some clients will only sell what gets good ratings on tripadvisor. Double its spending on TV; Advertising in 2015 to $60 Million
    11. Expedia Media Solutions
    12. Opentable: Expedia paid $280 Million for opentable and TUIS’s $6 Billion is up for sale.
  1. Priceline:  They have globally acquired Booking.com, 1.8 Billion in Kayak, Rocketmile,, Agada; Agenda, ADS,  Agoda, 2 Billion in Opentable. Priceline; Opentable; OpaquE. They differentiate themselves by Bid Price, Only B2C, Unique Customers, and Higher RevPar.  By spending well over $2 billion per year on advertising on the likes of Google.
  • com: The agreements, in theory at least, restore competition among online travel agencies, which until now had rate parity and most-favored nation agreements with hotels guaranteeing that competitors and the hotels’ own websites couldn’t offer lower room pricing than available through hotels’ contacts with Booking.com. Under the revised commitments, Booking.com will replace its existing price parity agreements with accommodation providers — sometimes also referred to as ‘most favored nation’ or “MFN” provisions — with ‘narrow’ price parity agreements. Under the ‘narrow’ price parity agreement, subject to certain exceptions, an accommodation provider will still be required to offer the same or better rates on Booking.com as it offers to a consumer directly, but it will no longer be required to offer the same or better rates on Booking.com as it offers to other on-line travel companies.“The revised commitments will also allow an accommodation provider to, among other things, offer different terms and conditions (e.g., free WIFI) and availability to consumers that book with on-line travel companies that offer lower rates of commission or other benefits, offer lower rates to consumers that book through off-line channels and continue to discount through, among other things, accommodation loyalty programs, as long as those rates are not published or marketed online.” In a news release, Booking.com said it is abandoning its “price, availability and booking conditions parity provisions with respect to other online travel agencies. This will create an environment that supports increased transparency and competition among OTAs which will ultimately benefit consumers, as well as hoteliers, by encouraging the freedom for properties to offer different pricing and booking policies.” Tour operators do not compete with hoteliers – they help them market and allow them the freedom to sell the rooms they keep for themselves on an ‘accommodation only’ basis. Online travel agents, because they only sell ‘accommodation only’, compete directly with the hotel. In a rather unexpected development, the online giant has agreed a settlement with the French, Italian and Swedish Authorities, apparently sanctioned by the EU, to prevent hotels from showing lower prices on their own websites than those being featured by Booking.com! The British Hospitality Association has also said that it is deeply concerned that online travel agents were ‘stifling’ competition.  TUI is reported to be looking to offload LateRooms.com, its online hotel booking service, as it seeks to raise hundreds of millions of pounds from the sale of non-core assets.
  1. AirBnb: $40 Billion; It charges a percentage from hosts and renters, but it doesn’t pay accommodation taxes. Under its terms of service, it doesn’t require its accommodation members to adopt safety, privacy and cleanliness standards. It doesn’t concern itself with accommodating those with disabilities.W-Focus Buy, Sell and Give Credit; R- Larger, sell multiple
  2. Instant Booking: Acquired Viator; $331 Million in acquisitions; MyTable
  3. Restopolis:  Leading restaurant reservation platform in Europe
  4. HotelBeds
  5. GTA
  6. Opodo
  7. Getaroom.com
  8. Uber: $18Billion in Market Capitalization
  9. Facebook Travel
  10. Google Travel
  11. GoEuro – Travel search has traditionally been dominated by websites and apps that focus on air and accommodation bookings. However, the increased popularity of rail and coach transport within the U.K. and Europe has opened a huge gap in the market to combine all modes of transport in one place. We are offering a must-have product for anyone looking to book coaches, trains and air travel domestically or within Europe. iTunes App Store and Google Play. The app is one of a growing number of mobile travel platforms, joining the likes of Busbud (an international bus travel site), Withlocals (a travel guide app connecting users with hosts in Southeast Asia) and Sam’s Club Travel (a platform offering members-only savings on travel accommodations), among many others.

FROM PROPHECY TO PROFIT

  1. For Profit (Organization)
  2. Margins ($) + Margins (%)
  3. Between Cash and Profit

A deadhead is an empty leg-when a bus goes home empty with no PAX. First class is 3 stars, Luxury class is 5 stars.

Ways to Raise Capital

  1. Angel Investors-80% believe in the idea because of the sweat equity you can put in
  2. VC-Sharks; income (15-50%); 10 years for 20 million; like converted notes; don’t want to be shareholders
  3. Mezonine (Crowdsource)- Charge 8-12% in interest; for example 200 Million with 2-3% interest; only mature insurance (5%) companies and private companies will fall in this category
  4. Bank-Low interest (0-5%), want to see collateral 5-10 years

Company’s assets have to be same as investment. OTA’s don’t make profits because of Turnover and they lose business fast

PROFITABLIITY

Share value goes down and the business company goes out of business; Minute you take loan as a public company you company decreases value. $Shares = Value in public company x #of shares.  The most important number in travle is the $MG and to keep cash flow positive.  Companies can use permanent room blocks to get a better day price. If credit is smaller give credit/receive = DOP (Day of Payable)/DOS (Day of Received). PRB help get inventory for high demand destinations. credit for suppliers.

H2H Via XML; Internet is a vary of DNS. Exposed to all searches/Proto – Turkey; Allegia

Priceline/Expedia (Hotwire) /AMEX/JPT

Many searches from one person

160 Million Bids/Day

 

 

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