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Although Marriott, the leader, has the best market capitalization among hoteliers with more than 45 billion US Dollars, it is far behind Amazon which surpasses 942 billion US Dollars. Even the all-powerful Booking (close to 81 billion USD) acts as a Tom Thumb with respect to newcomers.
Tourism is much too big to not attract the attention of Google and Amazon whose CEO has often declared that its platform would sell absolutely everything. While Booking and Expedia together spent USD 10.6 billion in marketing in 2018, Google is responsible for the majority. This visibility has allowed them to gain a large market share in hotel distribution.
In 2019, it has become unimaginable for some consumers to wait more than a few seconds for information, and there are more and more such consumers. As 5G approaches, the Internet user expects a complete, fast, intuitive tool able to adapt to his needs. He wants to be able to choose his hub when traveling by air, he wants to know the menu at the restaurant of the hotel where he is about to book, he wants to know what to see and do at the destination that is most suitable to his needs and desires. In short, the solution seems to lie in the online user experience and therefore also in the management of data collected by platforms. There is no need to mention here importance of being able to find everything on the booking platform. No wonder Booking.com is developing its presence in the travel chain.
“We accompany the traveler from the door of his home to a restaurant in Brazil. We are working on the verticals: booking a transfer from home to the airport, buying tickets for public transport or even renting a car.” Remarked Vanessa Heydorff, Managing Director, France, Spain and Portugal, Booking.com during the Global Lodging Forum 2019.
Amazon: a well-oiled machine
The platform knows its Prime customers (82% of American households, or 105 million subscribers) inside out and knows how to implement well-orchestrated marketing operations to earn even more. Globally and over ever-expanding sectors. It launched its video-on-demand service through intensive communications operations and it works.
The American giant has been selling airline tickets on its Indian site since May 2019. In this test phase, which only allows domestic flights to be booked for a limited number of destinations, it makes its cashback service available to customers with payment credits offered per purchase tranche. This is a perfect way to be aggressive on pricing by offering promotions while recovering the agreed revenue through the purchase of another product on the platform.
The American firm has also partnered with Booking.com, giving Amazon Prime customers access to Booking's Genius loyalty program for one year. It also has the tools to create a purchasing tunnel dedicated to tourism products by adapting its current platform. Its investment capacity would enable it to acquire an OTA and internalize the technologies and skills necessary to take a dominant position in this market. The American Expedia could be a prime target at a time when its capitalization is declining despite mostly satisfactory performances.
Alexa for hospitality is being used increasingly by upscale and luxury hoteliers. A differentiating tool that allows the giant to collect more and more data from its customers while allowing the hotelier to offer more and more services.
The case of Google
Google has launched Google Pay, its payment solution that integrates Paypal services. The next step will be to transform the tentacular search engine into an influencer for its users whom it will know through MOs and GOs so that it can push them towards the right product at the right time. The search engine - which is becoming much more than just that - has a new source of income. What will it take now and what will it cost to be promoted by the voice search tool?
The American firm has already made one change in its positioning with respect to its clients pay per click. Not only does it offer to promote, but it now offers its partners advertising consultancy based on the billions of data that are collected each second that people browse using the search engine. Last June, Lufthansa announced a partnership with the American company to set up reservations using voice recognition tools, but also to optimize the German company's visibility.
What Western smartphone user doesn’t use Google Maps on a regular basis?
- The application has more than 1 billion users worldwide each month
- It gathers more than 20 million customer reviews each month (data provided by Google)
- Use of the “Explore nearby” search option has grown 150% between 2017 and 2018
Whether traveling near or far, this tool has met a real need for its users. Over time tools have been developed that are increasingly complete and can even make it possible to call a service provider from the interface or to locate a specific type of service in the surrounding area.
What will the next stage be? Taxi reservations? Restaurant selection (even preordering)? Exploration of activities? All this is now possible through the application. Professionals can subscribe to the Google Business listing to be visible.
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