How does Booking.com Work? Business and Revenue Model

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How does Booking.com Work? – Business and Revenue Model

Booking.com is an aggregation website where one can compare hotel bookings. It is owned and operated by Booking Holdings. Booking.com has a headquarter in Amsterdam. Booking.com has listings over 228 countries and serves a wide range of customers. It has successful advertising campaigns which have helped the company grow its revenue. Booking.com is available in 43 languages and caters to its wide audience in different countries.

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Booking.com was founded in 1996 by Sicco and Alec Behrens, Marjin Muysers and Bas Lemmens. It operated as booking.org in the conception days of the company. It was later changed to booking.com. Stef Nordan was appointed as the CEO and given the reigns to lead the marketing and management of the company. In 2005, Booking Holdings acquired booking.com. booking holdings were known as Priceline group which went on to become the parent company for booking.com

To build a business like booking.com and understand how does booking.com work it is essential to know the basic history of the company and how was it founded.

How does Booking.com Work?

Booking.com helps people to plan their trips and travels hassle-free. It aids the planning and bookings of several kinds of travels that people want to go to. It is a one-stop solution for hotel bookings which gives the customers a holistic solution for their booking needs.

Let’s see how does booking.com work for their customers. This is imperative to understand since this is basically how booking.com makes money

How Does Booking.com Work for Consumers?

Here is a stepwise guide of how does booking.com work for consumers. Consumers can visit the website and browse several listings before making a booking, let’s see how.

Step 1: Select a destination

Firstly, a guest needs to select a destination for the hotel booking. This will help the website to filter out the best listings in the selected area or state that the guest is visiting.

Step 2: Filter your Requirements

Once a guest has selected a destination, the guest can then apply several filters based on the dates of the booking, the number of guests one wants to book a room for and the kind of hotels one is looking for. Booking.com has several listing from different types of hotels such as motels, hotels, villas, weekend houses, and much more.

Step 3: Select your Holiday Abode

After filtering several listing, the guest can then select from the several hotels listed on the website. When the hotel is shortlisted and selected the guest can then further the process of booking after understanding how does booking.com work.

Step 4: Pay for the Place

Once the hotel is shortlisted, the last step to confirm your booking is to pay for your room. The guest can pay for the hotel booking online or choose to pay at the hotel. This helps the hotel owners to provide several options for the customers and offer flexibility

Once the payment is done the hotel booking is confirmed for the customer. This is the process of how booking.com work for the customers or guests

How does Booking.com Work for Hotel Owners?

Hotel owners are an essential part of the booking.com business model. They provide booking.com with the listings which the basic part of the business. The company needs to provide the best benefits to the hotel owners to attract more of them to the website which in turn provides more options to the customers.

Let’s understand how does booking.com work for the hotel owners

Step 1: Register

The property owners need to register with booking.com in the initial phase. They can make an account on the signup page of booking.com. While registering the property owners need to submit all the essential details about their property. This includes important documents of the property, the size and the rooms available and other related information

Step 2: Verification

The information that the property owner submits is then evaluated and verified by booking.com. this step is necessary to maintain the authenticity of the properties registered on the platform. This is necessary to provide the customers with the best services available

Step 3: Set up the Property

Once the information is verified and evaluated, the property owners can now set up their properties on the platform. One can add the number of rooms available, the prices, pictures of the property, and several other details.

Step 4: Property is LIVE!

The property owners complete setting up the property on the platform. The owners must make sure that all the information is available. Now, whenever the property owners are ready, the property can go live on booking.com.

These are some of the simple steps to understanding how does booking.com work for the property owners. There are several benefits that booking.com provides to the property owners for being a part of the team. These benefits help the company to retain the current property owners and bring in more to expand the business to several states and countries

What is The Value Proposition of Booking.com?

It is essential to ask why will consumers choose booking.com over another similar platform while understanding how does booking.com work. It all comes down to the value that booking.com provides to its consumers. The business functions on five basic value proportions which are:

Accessibility
Cost reduction
Convenience
Risk reduction
Brand/Status

All of these features add value to the entire user experience of the platform which attracts and retains the customers. It also increases customer loyalty for the business.

Why Booking.com is successful?

One of the major reasons why booking.com is successful today is because of its revenue model. Most of the businesses in this field have either an agent revenue model or merchant revenue model. Booking.com is doing better than most of the businesses because of the agency revenue model.

Let’s understand how does booking.com make money with an agency revenue model

Merchant Revenue Model

The merchant revenue model is when the transaction is done between the property owner and the OTA. In this model, the property owner sells the rooms at a lower price than the usual to the OTA and the OTA earns revenue by selling them to the customers. This revenue model aims to sell the rooms in bulk and no guest standardization is done for the rooms sold.

Agency Revenue Model

Agency Revenue model is based on per room basis. The property owner has the final say on the prices at which the rooms will be sold and the property owner is entirely responsible for the maintenance of the rooms and providing services to the customers. The property owner has to pay the commission once the guest checks out of the hotel. This model does not seem financially lucrative but is transparent. This makes it easier for both the property owners and the customers to trust the business and rely on them for their bookings. Property owners find it reliable to trust the platform to get more business. In markets like India, discounts can make a huge difference in the sale of the rooms. However, if the deal has added values it can still make a huge difference.

Agency Revenue Model is what gives booking.com an edge and helps us understand how does booking.com makes money in the markets where other platforms fail to perform. The agency revenue model is difficult to adapt but has long term benefits for the business.

Booking.com Business Model Canvas

How Does Booking.com Make Money?

When you look towards building a business like booking.com it is imperative to understand how does booking.com makes money. This is important because businesses flourish only when the revenue model is pre-determined with a vision for the same.

Here are some of the major revenues which explain how does booking.com make money:

Commissions

The primary revenue stream for booking.com is the commissions generated on confirmed bookings. This is the commission charged to the hotel owners at the end of a term where booking.com charges commissions only when it brings business to the property owner. It is specified that no charges are levied on the owners other than these commissions. Booking.com does not charge any signup or listing fees from the property owners

Higher Listings

Property owners can pay to get a higher listing on booking.com. this will act as an investment since getting a higher listing on the platform will help the property owner to get more business from the platform. This is another way how does booking.com make money

This revenue stream acts for the benefit of both parties. Since booking.com is a huge platform and lists thousands of hotels, getting a higher listing will make it easier for the property owner to get more visibility on the web.

Earning revenue through advertisements is another way how does booking.com makes money. Booking.com hosts several advertisements on its website which generates revenue. However, the revenue generated from advertisement is relatively a small percentage of the total revenue generated by the business.

Now that you understand how does booking.com work and how does booking.com makes money make sure you hire the best developers to initiate your business. Make wise choices and build an empire out of this business and revenue model.

How to Launch Your Own Business Similar to Booking.com?

If you’re willing to start your own online travel business – you should go with Booking Clone which has customized features to let you roll with your own vacation rental business.

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