How Do Hotel Booking Websites Make money
How do websites like Booking.com , Trivago, Hotels.com and ect. make money ?
And the short answer is (drums) – commission.
Thanks for watching. This video is the end of the video and I’m glad you stayed around to see the answer.
No wait, the real question is how do they make money and how do they get away with it and any boy or girl want to find that out?
So Random, Joe are Joanna goes on Google and I’m seeing hotels near Chernobyl or whatever pleasant location you wish to comfort yourself for your vacation. And what pops up is a bunch of referring or affiliate debased websites, like Booking, Hotel, Trivago or whatever offering accommodation. How their business works, they are a commission based business. They make commission on every sale that goes through their platform or website, but the question is who do they serve and what is the main key that let them even being a platform or successful business.
Stick until the end of the video and you will have the answer to that question.
So first I’ve got some numbers for you guys. So price land group is the largest online travel company in the world. They are on Booking, Joda, venus.com, and kayak.com. Sorry, if I don’t pronounce them right in your language. Booking Holdings did over 12 billion dollars in revenue in 2017 and their competitor Expedia group with Jones hotels.com, Hotwire, Trivago, Orbitz and Travelocity did 11.2 billion in 2018. So what they’re doing-works. What are they doing? Why did we call out Googleand Jow or Joanna using Googl. They should serve those websites? As their commission based business. They should be serving the client and connecting the client to the business, but the reality is those website connect the client to Google. Why? Many of the hotel owners were kind of old school and were slow to go and get a proper website, proper on page optimization and so on.
So happened was especially than 12 years ago ,optimization was taken over by spamming back links and so on. So getting a good draft in front of the eyes of many people and the guys that didn’t do that would burnt down to Google Drakepage 4 5 6 7 pages and nobody’s checking or looking for.
So I like them, those platforms manage to do the proper SEO with berries many methods to wrap on Google for the best spots.
What is Acrosticdid for them if they managed to perfect customer acquisition and customer lifetime value because they were really good at squeezing the most out of the customers. Once they get your email, you know, there’s no going out of their platforms.
I mean, because no one bothers to click the unsubscribe button on the email, you know, down below, that’s actually an option.
So they were able to make money on the front end and on the backend from the use of front end sale is when a customer clicks on an ad or a keyword, customer clicks on it, goes on the website to purchases. Back end sale is upsetting that user or if you didn’t buy this registered they have his email to keep thinking is queued email coupon codes, discounts and whatever to make him convert they are modern conquistadors. No wonder they’re after the same thing- money, even worse – your money.
How can you prevent that?
If you’re a hotel owner you probably want to own your customers and make money from them on the front end and the back end because that way you get more money from your customers. You can afford to spend more money on customer acquisition because if you’re only getting $100 per conversion and it takes 10 people to convert, your cost per click is 10. Ths is the break even. But if you are making money the back end in making purchase two or three times on average and the life time value of this user goes to three hundred bucks or break even, to fifteen bucks, you can affors to spend 30 bucks.
You know where I’m going, right?
Customer acquisition or marketing ,this is another word you can use instead of marketing, is what will help you scale your business , hotel or whatever.
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