Introduction
Booking.com is the world’s most famous hotel search and service. Due to this system, people from all over the world have been able to book a hotel room. Booking.com was the result of a merger between European online booking firm Active Hotels and Booking Holdings, an online hotel search platform. Thus, users were able to view selected hotels, evaluate reviews and compare their favorite places. In addition, people could get a beneficial application from the site, including discounts, as hotels cooperate with the system and compete with each other. The appearance of Booking.com has made it much easier for users to find a hotel, which is why the service has gained popularity. The success, competitive advantage, customer experience design, culture, and online and offline channels of Booking.com will be explored to better understand the site’s popularity and success.
Success Factors
The success of Booking.com is primarily determined by the approach to CRM/CXM. CRM, as a rule, is aimed at optimizing and controlling the internal processes of a business. Whereas CXM is focused on improving the approach to customers based on new technologies and delivering customer-centered strategies. For example, Booking.com was the first to partner with small independent hotels and hostels. The company rightly believed that the wealth of travelers is different, and not everyone can afford to stay in luxury hotels. Another advantage of the website’s service was a low commission.
Customer Relationship Management helps Booking.com meet the challenge of increasing customer loyalty and customer satisfaction. The company believes that the success of the program depends on how satisfied the guests are with the service and how the employees treat them (Thomke & Beyersdorfer, 2018). In addition, Booking.com cooperates with the hotel’s support system, which makes it easier for users to communicate (Martin, n.d.). The effectiveness of a company’s CRM lies in the fact that the company keeps track of the client’s contact information and preferences to enhance the personalized experience during the stay (Thomke & Beyersdorfer, 2018). There is another excellent example of customer experience management.
From the customer experience management side, Booking.com was one of the first to use various marketing techniques that increased the likelihood of Booking. The site provides a quality review of customer reviews and complaints about the hotel, so that other users can draw their own conclusions about the place (Schaal, 2022). In addition, the system has excellent customer support in case they have questions (Thomke & Beyersdorfer, 2018). Users receive a quick response and suggestions for solving the problems that have created (Nasdaq, 2022). It happened thanks to a different approach to the market and more favorable conditions for the customers.
Customer Experience Design
One of the most important components of a successful business is the satisfaction of its visiting clients. Customer satisfaction analysis helps hotel operators assess their weaknesses and shortcomings, addressing customers’ real needs and desires. According to Thomke and Beyersdorfer (2018), “its staff ran more than 1,000 rigorous tests on its website, servers, and apps to optimize customer experiences” (p. 1). In order to develop a unique user experience design, Booking.com agreed on all the main intentions of the stakeholders. The company developed A/B Testing, which divided users into two groups (Thomke & Beyersdorfer, 2018). One included the current format of the site, the other group focused on providing feedback on innovations. Thus, management through the clients operated with the introduction of new ideas and changes.
In addition, the company is constantly expanding its products. Thus, in 2014 they launched a separate website, the main theme of which was vacation rentals (Thomke & Beyersdorfer, 2018). Management believes that a convenient long-term separation between hotel and accommodation bookings will allow users to use the site more quickly and successfully (Thomke & Beyersdorfer, 2018). However, this depends on the size of the audience and the readiness of the clients for innovative introductions to the established system.
Competitive Advantage
Creating a distinct strategy for each market is as vital to Booking.com as being able to adapt to market dynamics. The marketing strategy of Booking.com is of great interest to most market players for a reason. According to Statista Research Department (2022), in August 2022, the number of visitors to the Booking.com website exceeded 678 million. Booking.com uses a revenue management strategy in its business (Thomke & Beyersdorfer, 2018). Price optimization is the main idea behind the revenue management method based on booking curves.
A curve called the booking profile shows the average number of bookings for each time interval up to the actual booking date. Thus, the ratio of these two curves determines the nature of the behavior of hotel customers making room reservations. In all cases when these two curves begin to diverge, certain actions should be taken immediately. An essential element that gives advantages of the marketing strategy of Booking Holdings is the ability to prioritize and timely close business lines that do not bring the expected results (Thomke & Beyersdorfer, 2018). The company recently made a statement about the termination of Rate Manager, a revenue management tool for small and independent hotels, as they did not see a sustainable level of demand in the market for further investment. The main goal of Booking Holdings is to focus on empowering Booking.com and creating a one-stop shop where travelers can get everything they need. It can be concluded that the above examples are crucial elements that create competitive advantages for the company. Marketing research helps — that is, all activities in which the customer experience in specific scenarios and which provide us with data is purposefully studied. In addition, an essential aspect of the design is understanding what the client needs now and what needs the service does not yet cover.
Contrast Online vs Offline Channels
Online channels mean doing business through the online component with the help of the Internet without going into the material segment. Brick-and-mortar Channel refers to the traditional way of doing business and communicating through physical stores and offices (Boysen et al. 2021). Moreover, both regular business and e-commerce include similar components, such as strategies for promoting goods and services. The most significant difference between the two ways of presenting services can be traced to the way they are implemented. Providing services through online channels is relevant for such types of commerce as hotel booking. Since there is no need to visit the hotel, it is faster and more convenient to book a room online.
Brick-and-mortar businesses most often have a physical location and use online channels as an additional means of selling. Booking.com provides the opportunity to pay immediately on the site using a card or e-wallet (Thomke & Beyersdorfer, 2018). In addition, the modern system allows you to pay with cryptocurrency, which is gaining more popularity. Thus, both systems have flexible variations in payment for services. Booking.com allows one to process payments faster by sending an electronic check and easy ways to get a refund in case the customer cancels the service.
The following distinguishing difference between the two approaches is the attitude toward marketing. Brick-and-mortar and online service providers promote their products in different ways. Conventional stores often use traditional ways to advertise their services and products, such as billboards, television, or radio advertisements. At the same time, Booking.com is resorting to advertising on social networks, video hosting sites, and other digital advertising platforms (Thomke & Beyersdorfer, 2018). Placing regular ads doesn’t make much sense, since Booking.com is a service on the internet and people see its ads all over the place. E-commerce is significantly more economical than physical stores (Retaildogma). This is one of the reasons why many start a business through online channels.
Culture
Customer interaction is one of the most critical aspects that underlies any business. However, often the leaders of hotel booking companies do not attach due importance to customer centricity. Solving the problems of customer dissatisfaction allows a specially built system consisting of separate processes and procedures. The importance of culture in managing a customer-centric business in hotel industry is that it helps increase customer lifetime value. Booking.com is committed to providing customers with a positive experience on the site at all times (Thomke & Beyersdorfer, 2018). Effective marketing contributes to the development of a customer-centric business and company culture. After creating a culture of customer orientation, the company will be able to reduce marketing costs because by directly listening to customers, the organization can improve its relationship with the company.
The importance of an experiential culture in developing customer-centric business strategies cannot be underestimated. According to Kemperman (2021), experiments can be implemented in various areas of the hotel and tourism business. Booking.com has experimented many times in its field. An example of this is the radical redesign of the website homepage in 2017 (Thomke, 2020). All the main attributes of the site were removed, which damaged the convenience of interaction, and the changes were canceled.
Customer expectations of the hospitality industry, and consequently, room booking opportunities, may change dramatically. Changes are expected in all areas, and new booking opportunities may appear, the use of new services aimed at the stable development of the industry. In the future, improvements are expected in the usability of online channels and interaction of people with hotels. It will be essential to reconsider the relationship between hotel booking sites and the software they run on.
Conclusion and Recommendations
Booking.com was a trailblazer in many ways, taking risks and winning. Therefore, it was the first of the booking services to recognize that all types of housing can be in demand among tourists – from luxury chain hotels to hostels. In addition, it relied on small, inexpensive hotels (while Expedia.com cooperated only with large global chains). Booking continues to treat this niche with particular reverence, focusing on the needs of the middle class. Booking.com pioneered its famous marketing gimmicks, such as stating how many users are viewing a particular hotel right now. Soon, competitors began to borrow and actively use this technique.
All this happened gradually, and in those days, for several years, Booking did not receive significant profits. The first important step to improve the company’s CRM / CXM can be called cybersecurity because attracting new customers and retaining old ones directly depends on it. Another essential step for improvement would be to create a section on the site with user suggestions and take into account their opinion. The third crucial recommendation is to introduce a wider range of options when choosing housing and improve the algorithms of offers that are currently not working in the best way. Such steps will help the company expand its scope of activities and generate more profits.
It is the company’s set of processes to track, control, and organize interaction between a customer and an organization throughout the customer’s lifecycle. The purpose of such management is to optimize the interaction from the customer’s point of view and promote loyalty. To manage customer experience, Booking.com should pay more attention to creating customer-centric strategy that spans all interactions. Initially, much attention needs to be paid to search engine optimization and contextual advertising. The conversion of a visitor into a buyer also needs to be carefully monitored. To do this, it is possible to attract technical specialists or outsourcing, who will analyze customer reviews to determine the necessary changes.
It is worth noting that special attention should be paid to the company’s website. It must underline that special offers only apply to Booking.com or not write that the offer is limited in time if the exact price is available after that (European Commission, 2019). This will avoid various kinds of problems related to refunds to customers or customer dissatisfaction. The company will be able to build a more loyal and engaged customer base and ensure a positive reputation.
Reference List
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Carey, I. (2019) Expedia’s 23-year evolution in online travel. Web.
European Commission. (2019) Booking.com commits to align practices presenting offers and prices with EU law following EU action. Web.
Haworth, J. (2021) Booking.com fined $560,000 for GDPR data breach violation. Web.
Kemperman, A. (2021) ‘A review of research into discrete choice experiments in tourism: launching the annals of tourism research curated collection on discrete choice experiments in tourism,’ Annals of Tourism Research, 87(103137).
Martin, S. (n.d) How much commission does Airbnb, Expedia and Booking.com take (+ others). Web.
Nasdaq. (2022) Booking Holdings Inc. Web.
Retaildogma. (n.d) Brick & mortar retail vs. online retail. Web.
Schaal, D. (2022) Booking holdings boosts discounting to capture bigger share of travel budgets. Web.
Statista Research Department. (2022) Estimated total number of visits to the travel and tourism website booking.com worldwide from December 2021 to August 2022. Web.
Thomke, S. (2020) Building a culture of experimentation. Web.
Thomke, S. and Beyersdorfer, D. (2018) Booking.com. Boston: Harvard Business School.