In the first three months of the year, Europe with its weakest region, and countries like India still struggling with existential Kovid crises, airline ticket sales of booking holdings increased by 49 per cent.
That increase comes from the nearly 2 million tickets Kovid sold in the first quarter before 2019, as Booking.com, the largest brand of booking holdings, the sister brand in Asia, Agoda, did not offer flights at an earlier stage. But they started selling air tickets last year.
Another portfolio brand, Priceline, has also increased the number of airline tickets sold in the first quarter, starting with selling aircraft Name your own price, Since its inception in 1997.
Compared to the fourth quarter of 2020, the booking holdings aircraft business grew by 50 per cent to sell 3 million airline tickets.
Europe though, count on it Half of the booking holdings business, Saw booking strength in travel renewals in Israel, the UK and the US
Until recently, booking.com and Agoda focused on selling hotels and later alternative facilities, so brands were filling the clear gap. Over the years, it has made no sense to dilute the focus of brands on hotels because the amenities business is doing well.
Adding aircraft comes with low profit margins
Booking.com is the group’s largest brand, so adding aircraft to its range is an important part of CEO Glenn Fogel’s “Connect Trip” strategy, where the company hopes to offer flights, hotels, short-term rentals, packages, tours and operations. , And land transport is consolidated in one place for travelers and all of these are processed through the company’s new payment platform.
“At Booking.com’s flight offerings, we are now live in 18 countries recently launched in the UK,” Fogel told financial analysts on Wednesday in the company’s first quarterly revenue call. “As these 18 countries collectively represent more than half of Booking.com’s room nights in 2019, we can now expose a large number of customers to flights.”
In addition to the short-term rental increase, Booking Holdings is increasing the cost of its airline ticket business – lower margins compared to hotels.
However, airlines are a growing business for booking.com and Agoda, and if the parent company needs to improve its long-term strategy to provide passengers with a relatively seamless connected trip.
There are a lot of skeptics about Fogel’s connect-trip strategy. Is it really that different than what Expedia does?
Expedia.com offers a full-service product – aircraft, hotels, short-term rentals, operations, cars and cruises, for example – for years. However, an important difference with booking is that the latter intends to process most of its sales through its own payment platform and views it as a game-changing differentiator.
Expedia Group earned 10 per cent revenue from flights in the first quarter of 2019, which is a much higher percentage than booking holdings. Expedia Group on Thursday reported 2021 earnings for its first quarter, so there will be updated numbers on its aircraft business.
Fogel of Booking Holdings acknowledged that the 49 per cent increase in air tickets sold in the first quarter came from a relatively small base, but pledged to invest extra in the product “to make sure it’s definitely great, great service”.
Fogel clearly sees the need to have planes, but it is not fickle.
Photo credit: Booking Holdings booked 49% of airline ticket sales in the first quarter of 2021 as booking.com and Agoda accelerated their airline business. Bukin.com