On the surface, these apps seem to provide users with huge discounts on hotels, trains, and flights with little to no in-app advertising. How can these businesses be profitable?
In: Economics
They do not all have the same business model. Expedia will purchase room nights from hoteliers in bulk, then they resell them on their site. Kayak is an aggregator, and hoteliers will pay them a small commission for the rooms that Kayak sells. Hoteliers will also use these sites to sell their distressed inventory, meaning empty hotel rooms that they cannot fill on their own. They’ll give Expedia//Booking.com special pricing to fill those room nights, then Expedia/Booking take a small margin.
They all also have media/ads components and advertisers will pay to have their display ads on those websites.
Latest Answers