booking.com beating expedia in europe
436 days ago
 

Booking.com is thrashing Expedia in Europe, says survey

Today Morgan Stanley analyst Scott Devitt released a survey he conducted about Booking.com that reveals that Priceline’s subdivision is trouncing Expedia in Europe.

Devitt surveyed 120 hotel executives who manage booking channels at chain hotels and independent hotels in Britain, France, Germany, and Spain.

His survey found Booking.com drives 47% of European online travel agency (OTA) bookings—better than Expedia’s 21% role.

booking.com beating expedia in europe

Here’s Devitt’s take:

The predominant response on why hotels utilize Booking.com more than other online travel agencies is its larger customer base and higher website traffic.

Additionally, hotels find Booking.com’s extranet technology easier to use in terms of updating pricing and availability than other online travel agencies.

We are encouraged that Booking.com slightly increased its share in the European OTA market amidst the launch of a new product by its closest competitor (Expedia Traveler Preference), which directly competes with Booking.com’s agency hotel model.

Previously, Expedia predominantly focused on merchant hotel bookings in Europe and only provided an agency offering through Venere.

The fragmentation of Booking.com’s supplier base has served as an important competitive advantage. Booking.com offers over 310,000 hotels, with 25 different property types, while Expedia offers over 200K hotels.

By focusing on smaller, independent hotels, Booking.com has become a meaningful percentage of bookings for these hotels and a very important distribution partner.

Expedia’s higher exposure to hotel chains makes it more susceptible to the risk of a lower take rate during periods of strong occupancy.

Of the 38% of survey respondents who are testing or currently using Expedia’s Traveler Preference program, 60% expressed satisfaction with the product, mainly due to the ease of ETP integration with their reservation system.

According to our survey, Booking.com is one of the lowest distribution cost partners for hotels while Expedia.com charges the highest distribution cost. The majority of Expedia’s European business is still merchant and therefore Expedia burdens an incremental 2-3% credit card processing fee, which explains why it charges a higher commission.

 
 
Sean O'Neill

About the Writer :: Sean O'Neill

Sean O’Neill is a New Jersey-based reporter for Tnooz. He's also a regular contributor to BBC Travel.

Follow him on Twitter, Google+, and his personal site .

 

Comments

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

  1. Jasmine Bing

    Most of the products are region specific. I recently conducted a survey on my online survey tool, SoGoSurvey, where I found that while Apple iPhone is huge in US, Samsung’s Galaxy range is preferred in the UK.

     
  2. uwe

    expedia woke up already… their internal strategy is to get more hotels on board… will take a while, but thats the only way…
    the key as always is to not only add ‘sleeper’ (sorry for the word – didnt find a better one), rather than the good producing ones…
    what is getting huge is airbnb.com – they are stealing now already big big numbers of room nights from hotels…

     
  3. Dimitris

    Hi Sean,
    very good article and thank you for posting it.

    I wiil agree with the comments that Morgan Stanley’s research is stating the obvious.
    A fact that most hoteliers know for almost five years now.
    And reading that how can a hotel manager take seriously Expedia when it took five years for them to diagnose what seems a rather big problem.

    It would be very interesting to read the full results of the survey.

     
  4. Marcus

    what about HRS and hotel.de? Where they part of your survey or did you only focus on the other 2?

     
    • Sean O'Neill

      Sean O'Neill

      All of the consumer-facing OTAs were considered. Booking.com is in the lead.

       
  5. Craig Stewart

    Excellent article. As providers of channel management to thousands of smaller independent properties we have seen booking.com connect as many properties as they can (of any size) while Expedia turns down most of the smaller properties. We cannot see the logic from Expedia as many of the smaller properties have availability at good rates when the bigger ones have hiked up their rates and closed down availability. The larger properties are also less likely to give a deal with rate parity policed more strictly at chains and big hotels, smaller ones are more flexible.

    Expedia needs to seriously look at their contracting because there are thousands of smaller properties willing to connect with them if they would only open their eyes and arms. Perhaps this report will show them how far behind they are falling with a failing strategy.

     
    • Charlene Esaw

      Greetings, this is an interesting article indeed. Let me state up front that I am an Expedia CruiseShipCenters Franchise Partner. I just went on Expedia.com and searched for hotels in Rome, Italy and the vicinity. There were 1693. Expedia partner, venere.com has 1011 in Rome, Italy and the vicinty. Booking.com has 2040 properties in Rome, Italy and the vicinity. I have found it more economical to book travel with the hotel and air combined. While it is unfortunate that some of the smaller hotels feel slighted, at the end of the day, I guess the question is how many hotels does Expedia or Booking.com needs on their website.

       
  6. Michal

    Priceline the new Microsoft?

     
  7. Harjit

    What is Interesting is that none of the big internet players like Amazon or Google Hotel Finder has either no presence in Hotel Booking or have presence but makes no difference to Priceline and Priceline has become bigger than all OTA players worldwide combined.

    One would think this industry has no barriers to entry but priceline seems to be able to monopolize this industry

     
    • Sean O'Neill

      Sean O'Neill

      Yes, that’s an interesting point. “One would think this industry has no barriers to entry but Priceline seems to be able to monopolize this industry.”

       
      • Dorian

        Who thinks the industry has no barriers to entry? Booking.com and Expedia have been closing down smaller entrants for years.

         
  8. Chris

    Hello,
    Above and beyond the fact that Booking.com deals with more independent hotels, are you saying they also display more GDS hotel listings ? Are you also saying that Expedia does not display any GDS hotels?

    Thank you for this post.

     
    • Sean O'Neill

      Sean O'Neill

      Hi Chris,
      I’m not saying either of those things.
      Here’s some info on Expedia and GDS hotels: http://www.expedia.com/daily/home/vendor/gds.asp

      Best,
      Sean

       
      • Chris

        Thanks for this Sean!

        However what do you mean by agency offering in the article ? And is the difference of 100k+ hotels on Booking.com coming strictly from a higher number of independent hotels distribution ?

        Thanks again!

         
        • Sean O'Neill

          Sean O'Neill

          Hi Chris,

          Under the agency model, customers can choose to pay at the hotel on checkout (and the hotel then pays Expedia.)

          Under the merchant model, Expedia negotiates with hotels for wholesale room rates, which it then markets at a higher retail rate. Expedia pockets the difference.

          The survey says that Booking.com has a much greater proportion of independent hotels in its mix, but it doesn’t break out if the differential with Expedia’s inventory is mostly made up of independent operators.

          Hope that helps,
          Sean

           
  9. James Furse

    Sorry is this article dated 2013 or 2007?
    Well done MorganStanley! You’ve finally realised what anyone in the hotels industry has known for over 5 years.

    it’s a disgrace that Expedia has let this happen given its pre-eminent position up until the mid 2000s.

     
 
 

Newsletter Subscription

Please subscribe now to Tnooz’s FREE daily newsletter.

This lively package of news and information from Tnooz’s web site provides a convenient digest of what’s happening in technology that drives the global travel, tourism and hospitality market.

  • Cancel