While the travel season is coming up, main players of travel industry are offering more and more hot deals and cruises to survive the competition.
The popularity of travel websites has grown by bookings moving from offline to online, and 53% of all travel being currently booked online. With the caution, annual family spending for travel is growing 10% on average each year, aspirations hit OTAs (Online Travel Agencies) to win the struggle in selling more and more rooms. The current leader of U.S. OTA market Expedia Inc. controls over 70%. Nowadays Expedia has reached the valuation of $18 billion having recently acquired Orbitz and Travelocity. In the U.S. market it is followed by Priceline Group (including booking.com), which sells 1.2 million rooms each day worldwide. Last year data showed Priceline’s market capitalization record high of $66 billion.
Airbnb Triumph Gets Higher
However, Peer-to-Peer rental businesses give the preference to Airbnb platform, which has over 3 million listings on the website. This company is listed as a true favorite among the investors with the latest estimates hitting $30 billion as of March 2017. This most popular home-rental website finalized a $555 million funding round led by Google Capital as a backer. While there are lots of rumors about the company’s IPO possibilities, Airbnb is still holding back to go public in 2017.
Hyatt – Expedia Competition
Hyatt announced about its intention to cease the cooperation with Expedia at the end of July, 2017. It means Orbitz, Hotels.com and Travelocity will also stop featuring Hyatt rooms for their visitors. What is hidden behind these talks? Most likely, Hyatt is confident about setting up stronger bonds with its guests and has a bigger appetite about collecting up 15% to 20% intermediary costs wasted through distribution channels of Expedia Inc.
Marriott International and Starwood Hotels have finalized their $13.6 billion merger after long-lasting negotiation period. Now they possess more power to withstand the competition and bring a greater value to their guests. Combined they will own 1.1 million rooms all over the globe. They will more likely combine their loyalty programs and prioritize technology for real-time bookings. Earlier, in 2016, Expedia Inc. collaborated with Marriott to provide platform to boost Marriott’s dynamic travel packages across the U.S.
TripAdvisor Fusions with Priceline Group
One of the noisiest deals in the Industry is the fusion of TripAdvisor and Priceline Group. The partnership with a media site takes travel deals to the next stage and allows instant bookings on the spot. By signing the deal with the TripAdvisor, Priceline can stand out on Alphabet’s Google and attract more visitors from 390 million TripAdvisor’s active audience. While Priceline’s biggest platform booking.com is more preferred across Europe, it still has room to build up its business and survive its rivals in the United States.
Airbnb Deal with City of Los Angeles
According to the recent deal signed with Los Angeles city, Airbnb will be in charge of collecting lodging taxes from rental hosts, ensuring millions of revenue for the city annually. The deal will go into effect in August 2017. The City of Los Angeles imposes a 14% transient occupancy tax on the listing price (including cleaning fees). Airbnb estimates $20 million annual yield of taxes for the City budget.
Fintech Arrives in the Hotel Industry
Airbnb uses Braintree all over U.S. for payment processing. In February 2017, Airbnb finalized the deal to buy social payments startup Tilt. Founded in 2012 Tilt is believed to be the pioneer in peer-to-peer money transfers and it reached market valuation of over $400 million by 2015. This deal sheds light on Airbnb vision to bring people together and split trip costs. Another giant company in travel industry Expedia practices using crypto-currencies as a payment method. It lets the customers initiate transactions with Bitcoin.
Follow up our articles for more featuring trends of cryptocurrencies!