Travel industry biggest challenge - BitBook video series #1

At the heart of the travel industry lies a growing global economy. Each year, the global traveler pool is flooded with millions of new consumers from both emerging and developed markets, many with rising disposable incomes and a newfound ability to experience the world. The global hotel booking market is currently worth $528 Billion annually, and is expected to double by 2030.

 

 

We have seen the rise of platforms like Booking.com, who went from a Dutch startup in 1996 to a global enterprise with more than 17,000 employees. They grew at an unprecedented rate, and today 1.5 million rooms are being booked through their platform impacting the travel industry massively.

A small number of online travel agencies (OTAs) currently dominate the online market. Their user-friendly sites, together with the use of paid search and affiliate marketing to attract traffic, is what makes people book their holidays on their platforms. Because of this, hotels became completely dependent on these sites. Nowadays, commissions charged to hotels range from 15% to as high as 40%. On top of this, a payment processor is also required to handle the transaction, which adds around 3% more to the total price. Who ends up paying for this? The user.

After 3 years of working extensively with CEOs and Board of Directors of some of the biggest hotel chains, we have come to the conclusion that the industry’s biggest challenge is fighting high commission fees, and that the traditional playbook only benefits the booking platforms. Hotels have had no suitable alternatives. Until now.

 

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