With the rise of digitally savvy customers, the online travel platform Booking.com plans to add new categories to become the ‘one-stop shop’ for travellers. According to Santosh Kumar, Country Manager for India, Sri Lanka, Maldives, and Indonesia, the travel agency is looking to diversify its revenue stream, and is planning to expand beyond accommodation.
“Our customers want to book all elements of the trip on one platfrom, including flight, accommodations, cab service, attractions, and more. We also aim to remove friction in the travel process. Therefore, we will continue to focus on growing categories beyond accommodation,” Kumar said in an exclusive interview with Storyboard18.
During the Q1 2024 result of the Amsterdam-based travel firm, CEO Glenn said, “Outside of accommodations, we saw airline tickets booked on our platforms in the first quarter increased 33%, driven by the continued growth of Booking.com’s flight offering. First-quarter growth bookings increased 10%, which exceeded our expectations”.
Additionally, the company is ramping up its digital marketing strategies, capitalizing on its predominantly young customer base. Kumar mentioned that Booking.com has prioritized mobile discoverability and increased investment in brand marketing. “We are focusing on sport-based tourism through brand marketing such as Major League Baseball, Euro Cup, ICC Cricket, FIFA Women’s World Cup, etc,” Kumar said.
The company has witnessed a favorable repeat direct booking behavior from consumers using mobile apps compared to direct bookings on desktop or mobile in the first quarter of 2024.
“In the first quarter, mobile app makes of about 51% was five percentage points higher than the first quarter of 2023,” Fogel said earlier this year.
In the first quarter of 2024, the company’s marketing expenses increased by 6% year-on-year. However, marketing expense as a percentage of gross bookings was 3.7%, about 15 basis points lower than the first quarter of 2023 due to higher ROIs in paid channels and a higher mix of direct business.
Booking.com’s first-quarter revenue grew by 17 percent to $4.4 billion, and adjusted EBITDA of about $900 million increased 53% year over year.
‘Improving AI’
While Booking.com adopted Artificial Intelligence at the initial stage of its existence in 1996, the company now plans to leverage it on the consumer side, such as through its AI trip planner. Kumar emphasized, “Travellers can interact on the website or app using the AI chatbot to search for and discover destinations, as well as complete their transactions”.
‘Focus on next Gen travellers’
Kumar noted a significant rise in GenZ and the millennial population on the travel platform. He said, “India’s population is 60 percent below the age of 35, and this particular demographic will be crucial for our business for the next two to three decades”. Kumar added that Booking.com is actively researching and understanding the Gen Z and Gen Alpha travellers to enhance the firm’s growth in the coming years.