Online Travel Agency: Strategies and Expansion of Booking Holdings Inc

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Programme Title	Strategic Management
Module Code	BMP6033
Module Title	Case Study Analysis
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Assessment Title	Case Study/Project
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Introduction

Online Travel Agency abbreviated as OTA mostly known as Booking Holdings Inc established in 1997 has greatly reshaped the tourism sector (Tepe, 2022). Leaving behind booking.com, Priceline, kayak, Agoda & rental cars, the company seeks to provide customers with an easy way to access options as many as possible from across the globe. Having set for itself the mission “to make it easy to get the world” and vision “to empower travellers to find the best travel options,” Booking Holdings continually reorients its strategies to improve the customers’ experience as well as to expand the coverage of its market share in the context of a rapidly growing competition ahead.

Background of the company

Booking Holdings Inc. is a major global OTA that deals with numerous travel fare aggregators and travel metasearch engines. Began in 1997 the company has diversified its brands to include Booking.com, Priceline, Kayak, Agoda, and Rentalcars.com (MAD?RY?OVÁ, 2021). Booking Holdings, which now controls the online travel market, was originally incorporated in Norwalk, Connecticut, to address travellers’ needs. The company’s mission statement stands as “to make it easy to get the world” while the company’s vision is to “enable travellers to find the best travel options across the world”. The following are the principles that are derived from the company’s outlook on improving customers’ experiences as well as increasing access to travel. These principles guide its strategic decisions because the company aims to ensure enjoyable, efficient travel to customers.

Mission and Vision of Strategy

In the mission and vision statements, Booking Holdings has substantial building blocks on which it wants to structure its endeavours. The mission insists on simplicity and availability; thus, the organization invests in technological advancement and satisfying its customers. This focus is depicted by their consistent improvement in the state-of-the-art search technologies and interfaces that de-clutter the overall booking process for the consumer. Co-ordinating the total experience makes it possible for Booking Holdings to encourage its clients to keep coming back because it would be seen as offering exceptional value in a highly competitive market. Secondly, the vision also creates an international market appeal and demands the company to penetrate the international market (Yuan, et. al., 2023). This has led to Booking Holdings having to draw different strategies to match those of the local market while at the same time having a uniform brand across the world. For example, to meet consumer needs the company has added localization of content and provision of regional travel options.

Environmental Analysis

External Environmental Analysis

PESTLE Analysis

1. Political Factors: The travel industry is much affected by political decisions and policies, bilateral and multilateral agreements, or legislation. Conditions such as changes in visa policies or tourist restrictions like during the current pandemic shifted the demand for travel services. Another factor that decides consumer confidence and travel is the political stability of the country that is hosting visitors. As of now, the US government has changed the president and opted Donald Trump for their work. For example, instability in political situations in countries that attract tourists will have a negative influence on Booking Holdings’ operations in ways such as reduced visitors.

2. Economic Factors: Gross Domestic Product growth rate, rates of unemployment, and the general spending culture all have a way of determining travel (Khalid, et. al., 2020). A kind of recession in an economy (15% in November) can mean a cut back on leisure travel whereas a kind of prosperity means an improvement in the rate of travel. Also, changes in the exchange rates affect the prices of travelling for consumers from different countries. Booking Holdings says it must continue to be responsive to economic conditions within the global economy so that the firm can change how it implements its pricing and marketing.

3. Sociocultural Factors: Global demands and trends affecting travel and accommodation such as shifts in consumer preference towards particularistic experiences, and eco-tourism, are features of the environment that influence the services of Booking Holdings (Ryan, 2020). Experiential travel can be seen as part of the trend towards the demand for experiences rather than possessing possessions. This trend has made Booking Holdings expand its services to purported bookings and services that are not limited to just hotels but rather provide experiences and activities that meet the modern world traveller's needs.

4. Technological Factors: In the travel and tourism sector, rapid changes in technology are becoming the forces of change (Khan, et. al., 2020). The use of technology such as artificial intelligence, machine learning and mobile technology improves customer experience and satisfies, the need for personalization thus helping the company like Booking Holdings to compete effectively (Vinod, 2023). For example, better customer satisfaction and being able to lock them into your service may be achieved through data analysis for recommender systems. Another factor that affects the number of users is the company’s ability to maintain high-tech positioning to continuously pull in more customers.

5. Environmental Factors: The rise of environmental awareness is making tourists look at the options they take when travelling. Booking Holdings must respond to this issue by insisting on environment-friendly hotels and tourism. There are processes of sustainability currently being adopted, including choosing hotels that are environmentally conscious and informing guests to act sustainably (Merli, et. al., 2019). It is also evident that through the establishment of sustainability strategies, consumers are shifting towards environmentally sustainable products, and Booking Holdings can benefit from this.

6. Legal Factors: Failure to adhere to most internationalities enables a company like Booking Holdings to jeopardize consumer confidence and face legal consequences. Some obstacles might occur due to the differences in legal systems of the countries; however, it is crucial for the protection of the users’ information as well as for achieving the general ethical goals of companies.

Porter’s Five Forces Model

1. Threat of New Entrants: The online travel market thus is an open market because existing players do not enjoy a very strong entry barrier (Ethiraj and Zhou, 2019). However, first entrants may lack brand recognition and economies of scale which are key sources of competitive advantage in the industry in this case bounded by Booking Holdings.

2. Bargaining Power of Suppliers: Most of the travellers who book through Booking Holdings use a vast number of hotels, airlines, and other services. Despite the presence of supplier power, high negotiation power is averted due to Booking Holdings’ bargaining power, hence the bargaining power of suppliers is strong.

3. Bargaining Power of Customers: there are many travel options in the market, and the customers also have strong purchasing power (Zhang and Chung, 2020). Economies of scale also reveal that prices remain relatively sensitive to customer demands and hence require Booking Holdings to maintain affordable charges and high-quality services.

4. Threat of Substitutes: Threats include new generation OTA services, brand hotels’ websites and other distribution channels like Airbnb. They need to continue and diversify the legacy of investing in added value and superior customer service. The company has many demands in its inventory, as well as easily searchable, and these are important factors in sustaining its competitive position against substitution goods.

5. Industry Rivalry: The travel market has high competitiveness with some major competitors such as Expedia and Trip.com Group Limited. Innovation must be ongoing and the organization must engage in relationship-building with its stakeholders to sustain a competitive advantage (Kahura, 2023). It means that Booking Holdings need to invest in marketing and technology that can outdo competitors as well as bring to market services that consumers would be interested in.

Internal Environmental Analysis

Organisational Culture

Policies of Booking Holdings are designed to support ideas and focus on customers. Such an environment enables the company to promote the adaptation of technology and provide optimum user experience to its employees. The culture complies with the mission to improve people’s travels worldwide. Also, the effort that was made to put into practice collaboration and cross-functional teams is helping the organization to adapt quickly to demands changing in the market.

Resources and Capabilities

It identifies three areas of competitive advantage for Booking Holdings, namely, sizeable investment in technology, followed by marketing expenditure. It has better data analytics features which help in customer targeting and better engagement, which is vital for OTA to survive. The technological system of the company helps in real-time information processing and hence the capacity to meet customer needs is highly developed.

Organisational Structure

The current organisational structure of Booking Holdings is suitable to accommodate its brands and businesses across the world. Local autonomy enables the delivery of regional market solutions, but centralization of certain significant strategic choices guarantees synergy across its companies (George, et. al., 2023). This means that, although the company can adapt to different markets and strategies at a local level, there is a coherent corporate strategy that is maintained across the business.

Assessment of Strategic Options

1. Expansion into Emerging Markets: Focusing on high-growth areas to make more of a market share and grow out of increased enthusiasm for travel in places like Southeast Asia and Africa (Park and Ungson, 2019). These markets are opportunistic ones, as overall disposable income and the middle class have been identified as key drivers of travel. In this way, Booking Holdings gets a chance to enter these markets first and adjust to local conditions later, before competitors will possibly appear.

2. Diversification of Services: Additional sources of revenues emerging from services beyond conventional hospitality can be experienced in offers of transport and insurance (Liu, et. al., 2021). Using this approach, Booking Holdings can meet customers’ demands and needs as they wish because it is designed to accommodate them. The company can also increase customer value by combining related services, thus increasing the number of people they can do business with.

3. Investment in Sustainable Travel Solutions: The creation of relationships with environmentally friendly lodging options and the encouragement of environmentally friendly tourism can be compatible with customers’ attitudes and result in an improved brand image. Booking Holdings can lure consumers with some measure of environmental consciousness by affiliating itself with sustainable travel. The use of sustainability initiatives can also help the company to stand out in a competitive space.

Selected strategic option

Considering the possibilities, it may be mentioned that “expansion into emerging markets” is the most effective and promising decision. This option is somewhat in line with the company’s mission and vision, which centres on accessibility in the global markets and, it is also aimed at extending the company’s reach to new customers besides the existing opportunities for expansion. High-growth markets also present an opportunity for the company to spread its risks in terms of revenue in that, the reliance on the developed markets that would probably experience slow growth is avoided.

Recommendations

1. Market Research: Make a thorough analysis inaugurating potential growth markets. This means that any undertaking planning to venture into any given market needs to understand the market consumer behaviour, legal systems, and other stakeholders in the market (Dwivedi, et. al., 2021). Market analysis will enable the customization of communication strategies that would be relevant to target customers in those markets to help Booking Holdings to opportune itself in such markets.

2. Localized Marketing Strategies: Even the use of attractive slogans should lie in the creation of relativistic slogans based on local cultures and preferences (Rosenbaum-Elliott, 2020). The recommended strategy of employing influencers and social networks will also increase brands’ acceptance in the local market. Communicating with local consumers and ensuring that branding communicates the right cultural signification will enhance branding in new markets. Another way that technology can help in increasing customer relations is by personalizing products to suit the personal client preference of the region.

3. Strategic Alliances: Develop cooperative relations with travelling agencies, tourist offices and other related establishments that offer accommodations (Werastuti, et. al., 2019). Such alliances may help to enter the market and improve the range of services provided in courses. Partnering with other already engaged players can help identify opportunities and sources for new knowledge about the local context. Such partnerships provide opportunities to reduce risks that are associated with engaging in unfamiliar markets.

4. Sustainability Initiatives: Introducing environment-friendly travel services in growing markets to capture the current emerging market trends and to gain a reputation in the market (Soni, et. al., 2022). One could be to market earth-friendly accommodations and attractions that could elicit the green consumer. Building the image of sustainability can help Booking Holdings in the competitive markets when competing with several other similar service providers.

5. Monitoring and Adaptation: Set a benchmark that measures the possible success of the companies in their quest to expand markets. There is another important consideration, flexibility and ongoing surveillance of local market factors. Customer and partner feedback will be obtained to help Booking Holdings adjust its strategies and enhance customer experience.

Conclusion

The company operates in a highly competitive environment, the industry overall is subject to multiple external and internal factors affecting the activity of the company. Therefore, through mission and vision reappraisal, analysis of the environment, and examination of its options, the organisation is well placed for further success. The choice of the direction to enter the emerging markets is highly appropriate for Booking Holdings in the long-term horizon given the prospects. The detailed approach to the development of the strategies fit to fill its niche and to counterbalance market threats should reveal the ways for Booking Holdings to prolong its leadership and achieve sustainable growth from the perspective of the travelling business sector.

References

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