These days, great businesses are built around an idea and the Internet — the travel business is no different.
Players in this industry contribute to its ever-changing landscape with innovative ideas and impact the where, when and how we travel.
A couple of decades ago, planning a trip began with a visit to the travel agent or maybe picking up a brochure. Now, we have the world at our fingertips, thanks to the Internet.
Here are 5 companies that completely transformed the travel industry:
Expedia EXPE
For one of the most recognizable online travel companies, Expedia, ideas are the key to success.
According to CMO, president and CEO, Dara Khosrowshahi, Expedia works on 50 different versions of the website at any given time and provides daily updates to clients.
“What we find is one-third of ideas work, one-third are things the consumer doesn’t care about, and one-third fail. The difference between failure and success can be so small. You need to harness audiences that over time will show you if it’s a good or bad feature. We don’t have to guess, just test,” Khosrowshahi said.
Apart from this, the company has a prudent growth plan for both domestic and international markets, which has kept the company afloat amid the recessionary times.
Management has an effective quantitative model to study customer behavior and spending pattern, as well as the company’s success rates. These success rates are in turn used for gaining suppliers, further increasing the choices offered to visitors. The vast options attract more customers, which translate into revenue growth and margin expansion. Given the rapid increase in its international business, Expedia is building its technology platform to support the growth in its targeted markets.
Also working in its favor are the statistics. According to the Travel Technology Association, the majority of U.S. travelers (55%) choose online travel agencies when searching for hotels.
Expedia has been snapping up companies to increase its penetration in existing markets, expand in others and eliminate competition. In less than a year it acquired Wotif, Travelocity and Orbitz.
Priceline.com Inc. PCLN
Priceline has pioneered a unique e-Commerce pricing system known as demand collection system to help consumers save money on a wide range of products and services while enabling sellers to generate incremental revenues.
Using a simple and compelling proposition — Name Your Own Price — priceline.com collects consumer demand in the form of individual customer offers guaranteed by a credit card, for a particular product or service at a price set by the customer.
This is a good deal for suppliers too because it helps them sell highly-perishable extra inventory.
The company’s travel-related offerings cover hotel rooms, airline tickets, rental cars, vacation packages, cruises, “things to do” at popular destinations and travel insurance.
Priceline has partnered with hotels, airlines companies, cruise ships, transport companies and vacation providers, and accepts bookings on their behalf. Information on these offerings and customer reviews are available on the company’s owned or operated websites, thus helping customers take informed decisions.
Alphabet GOOGL
Surprised? Well, don’t be. Alphabet has earned its place as the world's most favored travel agent. How?
Its Google Maps is currently the most-used mobile app worldwide. After the upgrade last year, each user's map is customized with venue suggestions based on search history. This is not all! Alphabet’s $1 billion acquisition of travel start-up, Waze, gives users real-time traffic and accident updates, and helps them to reroute accordingly.
Google Now, the company's intelligent predictive assistant, is somewhat of a travel agent. It suggests flights, car rentals and hotel reservations based on the traveler's time and location.
We believe that Alphabet is on its way to becoming the ultimate tool for travelers to help explore the world.
TripAdvisor TRIP
TripAdvisor was founded by Stephen Kaufer, Langley Steinert, and several others in 2000.
According to Kaufer, "We started as a site where we were focused more on those official words from guidebooks or newspapers or magazines. We also had a button in the very beginning that said, "Visitors add your own review", and boy, did that just take off. Pretty soon the number of average consumer reviews far surpassed the number of 'professional reviews'. That is when the site really turned into this collection of what the normal traveler was saying wherever they were going.”
The result? TripAdvisor is one of the largest online travel research companies in the world. The company not only provides a platform for users to share reviews, ratings and opinions on hotels, destinations, attractions and restaurants, but also facilitates hotel bookings through its web portals.
Online reviews have altered the way consumers make travel plans as one can find online evaluation of everything under the sun.
According to the Irish Times, websites like TripAdvisor attract 340 million and 142 million exclusive visitors, respectively, every month. “The consensus they gather displays prominently in Internet search results, giving them the potential to make or break a business.”
MakeMyTrip.comMMYT
As mentioned before, information technology continues to play an essential relationship-building role between travelers and tour operators.
Going back, MakeMyTrip.com was a total game changer. It altered the hotel and ticketing industry clearly showing the long-term potential of Indian sites.
This OTA offers travel products and solutions in India and the U.S. and has a market capitalization of $826.72 million. The company's services and products include air tickets, customized holiday packages, hotel booking, railway tickets, bus tickets, car hire and facilitating access to travel insurance.
It recently purchased a minority stake of around 28% in HolidayIQ, a popular Indian travel community and holiday-planning recommendation engine, for $15 million.
This strategic investment will help the company beef up its hotel content and reviews for Indian customers, and enhance its offerings.
Final Word
The travel industry is fast evolving. Companies are devising newer ways to simplify traveling while making it more economical.
Start-ups like Airbnb are also intensifying the competition for the existing players. Airbnb is well on its way to usurp major hotel groups worldwide without owning a single hotel.
The start-up lets users rent out spare rooms or vacant homes to travelers. It exceeded 10 million stays on its platform last year, doubled its listings to 550,000 (in 192 countries), and, according to a source familiar with the company's business, tripled revenues to an estimated $250 million.
While new innovative companies are definitely coming up, we believe that the ones discussed here have the financial muscle to compete with them and continue to alter the way we travel.
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