The document analyzes the competitive landscape of the online travel agency (OTA) industry, highlighting the significant market influence of Booking.com over Hotels.com due to higher advertising expenditures and better user experience. Key recommendations for Hotels.com include simplifying the user interface, offering diverse payment options, and enhancing customer service capabilities. The findings suggest that by implementing these changes, Hotels.com could improve their market position and customer satisfaction.

1. P R E S E N T E D B Y
M A R K E T I N T E L L I G E N C E ,
I N D U S T R Y A N A L Y S I S & S T R A T E G Y
T E A M E
Value Chain
Analysis
Chen Yang Lim, Clara Schuller-Delaval, Ismat Accad, Lavinia Orsi,
Çagan Koç, Nicole Hage Chahine, Sebastian Cassis

2. V A L U E C H A I N A N A L Y S I ST E A M E
Industry landscape:
• The Online Travel Agency (OTA) industry has fierce competition.
• Consumers are increasingly price-driven which makes the two-way
partnership between hotels and OTA’s critical.
• OTA’s are undoubtedly exerting more and more market influence as
their negotiating power is increasing.
• It all comes down to who pays the biggest amount of advertising
money to rank the highest in SERPs and this is a game Booking.com
excells at.
Main findings:
• Booking.com spends more on paid advertising and because of this,
it’s getting much more traffic from paid search. (1m vs. 56 k)
• The brand recognition of Booking.com is already much higher than
Hotels.com.
• Also, booking.com has more larger variety and bigger portfolio.
• The hotel profiles are simplified in Booking.com compared to a
more complex Hotels.com. (symbols vs. sentences in bulletpoints)
• Booking.com not only offers a more user-friendly experience, it also
tries to perfect the customer experience with a budget for solving
customer issues before and after sales.
Recommendations for Hotels.co.uk
• Design a simpler UX suitable for people on the go.
• Offer cheap last minute deals that will allow Hotels to sell their
unsold inventory.
• Offer different payment options. (same day bookings without credit
card information)
• Empower employees by allocating higher budgets for service
recovery.
• Advertise the reward system better. Treat it as a separate brand.
Include gamification with for example different stages to reach and
earning points not only on rooms but on food and beverages as well.
• Offer more accommodation types such as camping or renting boats
to capture as much customers as possible.
S ummary

3. T E A M EHOTELS.COMBOOKING.COM
Inbound
Sales and pricing
agreement with hotels,
approx. 15% commissions
887,000+ Properties
Higher negotiation power
due to brand recognition
Sales and pricing
agreement with hotels,
approx. 15% commissions
435,000+ Properties
Less Traffic means less
negotiation power
Outbound
Payment Methods
(Pay at the hotel and
booking without credit
card info)
Owned review system
You always have to give
your credit card info, no
more flexible payment
options
Genuine Hotels.com+
Expedia reviews +
Tripadvisor rating
Operations
Info about rooms and
hotel policy (simpler with
Symbols)
Constant price tracking
for best available rate
guarantee
Offer various options for
accommodation such as
boats and camping places
Detailed info about rooms
and hotel policy (a lot of
text; less user friendly)
Constant price tracking
for best price guarantee
More traditional
accommodation types (less
choice)
Marketing
and Sales
Paid online advertising
(Ads in 41 languages)
Google Partner for hotel
search
Flash sale driven
E-mail Marketing
Sales force for hotel
account management
Less paid search / Lower
on organic
Less use of Scarcity
principles on the website
E-mail Marketing
Hotels.com rewards
Sales force for hotel
account management
After
Sales
24/7 call center
Excellent customer
service (Budget allocated
to employees for service
recovery)
24/7 call center
Average customer service
Collect reward points
V A L U E C H A I N C O M P A R I S O N

4. V A L U E C H A I N A N A L Y S I ST E A M E
M A R K E T R E S E A R C H
Booking.com buys more
paid search
“Google Hotel Finder” references the hotel’s
price and Booking.com’s price of the hotel.
Booking.com has
a better UX
Loyalty program
Hotels.com™ Rewards
Daily time on website per visitor:
9:24 mins vs 6:41 mins
Daily pageviews per visitor:
7.20 vs 4.78

5. V A L U E C H A I N A N A L Y S I ST E A M E
USD 2.61
billion spent on digital advertising in 2015
Google advertising 2
Priceline Group USD 1.5B
Expedia Inc. USD 1.0B
Main price reference on Google
Booking.com Hotels.com
57 418
site
ranking
in UK
MORE
ADVERTISING
SPEND
More
Properties
(estimated)
1
venturebeat.com/2015/11/05/booking-com-largest-google-advertiser-facebook-hasnt-cracked-the-code-on-direct-response/
2
wsj.com/news/articles/SB10001424052702304819004579487931119016044
W hy is B o o king . c o m winning ?
887,000 435,000

6. V A L U E C H A I N A N A L Y S I ST E A M E
h o tels . c o m V alue chain be f o re & a f ter
After
Sales
Many customer service complaints
Rewards based on nights stayed
Allocate more budget for customer service for
higher customer satisfaction
Points rewards based on money spent when
booking as well as the number of reviews shared
Marketing
and Sales
Less paid advertising
Sales force
Last minute deals
Invest more in paid advertising
Increase sales force to sign additional deals
Offer more flash sales
Operations Not fully personalized online user experience Simplify design for hotel features and options
Real-time geolocation based offers
Outbound Less payment methods options than
Booking.com.
Offer more booking without credit card info
for same day reservations
Inbound Less properties and accommodation
types
Increased accommodation types and amount
of properties.
Before After

7. V A L U E C H A I N A N A L Y S I ST E A M E
Travel is the only
thing you buy that
makes you richer.
“
“
an o nym o us