Booking.com Competitive Advantage

What did you learn from your time managing Booking and Expedia, about why those businesses, more specifically Booking, are so good at converting traffic?

Both are great companies, but Booking and Expedia are very different companies. Let’s address Booking. First of all, Booking used to be lodging only. At the time, it was a hotels-only website, which makes it much simpler to manage, when you only have one product or category or product, because you can focus and go much deeper. That’s one very important piece. They’ve come very far on the lodging side. I’ve been tracking and on their home page, they put how many options they have. They used to have hotels and it was about 200,000 the first time I saw that figure. Now it’s over 20 million and they call it lodging options. You have igloos, vans, boats, cabins, tree-top houses, you name it. But at the time, it was only hotels. There are, allegedly, in the world, half a million hotels; no one really knows. But allegedly, there are about half a million regulated hotels. These guys went far beyond that, because they’ve been focusing on getting everything that has a bed or anywhere you can sleep. They have an army of people, trawling the world, making sure they contract absolutely the can. That’s very important, because they have direct contracts.

Then the second pillar of their success is, I would say, measurement. They measure absolutely everything. They have, allegedly, 150 to 280 tests; this is something l read in the press. I’m not disclosing anything private here. They are constantly AB testing, to understand what their user likes most. How do the eyeballs in front of the booking site interact with them? They change, based on that behavior. They do that very well. The website is pretty ugly, in my opinion. But again, that’s just me. It’s one of the best performing, if not the best performing on earth. So it’s not a matter of ugly or beautiful, it’s a matter of performance, when you come down to marketing. But the comments and the way it’s set up and so forth, to me, it’s not beautiful, but it works. They know this, so they are not optimizing for beauty. They are optimizing for ROI and conversion, which is the way to do this, in marketing.

So a single product shop or a single category shop, very capable team of people, all over the world, constantly sourcing and managing that inventory. Then focusing on measurement and measuring absolutely everything. Also, being quite savvy and quite advanced, from a technology perspective. These guys invest significant amounts of money on product development, on engineering. Look at their figures. Take any of their statements and this is public data, and you see how much money they are putting in. I think that’s the recipe for success that has made Booking what it is today.