Introduction
Although the Covid-19 outbreak has presented companies with unprecedented challenges, many organizations, such as Booking.com and Expedia, responded by reengineering their businesses and developing innovative products and services. The hospitality industry ranks among the prominent sectors which were enormously affected by the highly infectious novel coronavirus. Following the explosion of the pandemic, governments imposed travel restrictions, social distancing orders, and shelter-in-place advisories to mitigate the spread of the virus. This instantly led to the paralysis of vacations, hotel bookings, and occupancies drop sharply across the world.
However, Booking.com and Expedia, globally reputed and leading players in the hospitality industry, have recognized the indispensability of continuous innovation and the adoption of competitive marketing strategies to remain active and retain their market share. Their intrapreneurship sought to enhance customer experience by creating seamless, connected, and fully integrated products for travelers. Although the hospitality industry is a highly dynamic sector, businesses can improve their competitiveness and remain relevant by adopting innovative strategies, which ensure flawless service delivery.
Booking.com and Expedia
Booking.com and Expedia are dominant and rival players in the lucrative online travel market. The two organizations host a suite of sites that offer a wide array of diverse vacation services. Formerly the Priceline Group Inc., Booking.com integrates travel fare aggregation and focuses on or combines vacation reviews and costs, and web-based information retrieval and classification tool. With operations in over 230 countries and territories, it ranks as the worldâs leading provider of digital travel and related services through various consumer-facing brands, including KAYAK, Priceline, Booking.com, Agoda, and OpenTable (Martin-Fuentes and Mellinas, 2018). In this regard, Booking.com offers online travel, reservation, and other related services to consumers wishing to explore the world at competitive prices.
Similarly, Expedia facilitates global excursions through its industry-leading technology solutions which support fare aggregation and cost ranking. It offers its services through the Expedia Group family of brands, which encompasses entities such as Partner Solutions, Vrbo, Egencia, Orbitz, Travelocity, and Hotwire. Talwar et al. (2020) note that online travel agencies’ survival depends on their ability to provide superior value propositions in the industry, which is characterized by intense competition.
However, the need for continuous innovation is a critical driver of ensuring that the organizations remain competitive, relevant, and increasingly strengthen their market position. For instance, Booking.comâs regional boss, Tracey Foxal, contends that in the hospitality industry, despite the extensive technological integration, service providers have been unable to render seamless service to consumers (Mitchell, 2019). As a result, people are yet to start enjoying fully connected trips through any of the online travel agenciesâ platforms. This implies that customers continue to experience hiccups in various areas, such as transport, delayed responses from property owners, and real-time recommendations for other amenities and auxiliaries.
Importance of Integrating Intrapreneurship in Booking.com and Expedia Company Cultures
Booking.com and Expedia should incorporate the concept of intrapreneurship in their respective organizational cultures. Many businesses worldwide competing in the global economy have adopted this mantra as a guiding principle and an inventive ideology to bring positive changes in the industry. With the hospitality sector experiencing the disruptive effects of innovative and tech-driven entrants such as Airbnb, it is imperative for organizations in this market to foster innovation within the existing organizational frameworks. These strategies can improve their processes, and competitiveness, and register transformative breakthroughs.
Aparicio, Turro, and Noguera (2020) assert that intrapreneurship provides the requisite environment for supporting and sustaining innovation over time, business regeneration, and change acceleration and management. This perspective is corroborated by Eze et al. (2018) and Idrees, Vasconcelos, and Ellis (2018), who posit that the inculcation of intrapreneurship spirit within the organizational culture reinforces innovation and creativity. This is achieved by mitigating issues such as resistance to change and other risk-averse habits which exist in organizations. Therefore, Expedia and Booking.com should integrate intrapreneurship to promote collaborative efforts toward developing complementary and interdependent service delivery solutions.
High Connectivity of Services and Platforms
Expedia and Booking.com can nurture an entrepreneurial concept in their organizational cultures by increasing the connectivity level of their services and platforms to promote interdependency. The online travel services sector encompasses a complex web of suppliers, tour operators, travel agents, tourism products, and destination market organizations alongside a string of other businesses and auxiliary functions. The providers of online platforms operate as intermediaries between the customer and the suppliers of the desired services. In this regard, these agents are the direct point of contact for travelers intending to procure packages and experiences, such as transport to the destination points, accommodation, attractions, recreation, and other events.
Since travelers extensively use these platforms, the companies have, over the years, accumulated personalized information which they can use to develop customized recommendations and itineraries to increase customer satisfaction and revitalize the platformsâ utility. For instance, travelers booked in a vacation destination through Expedia can realize higher satisfaction levels if they can seamlessly access the unavailable services from the Booking.com platform. As these online travel agents continue to exert pressure on the traditional brick-and-mortar practices in the hospitality industry, inter-organizational information sharing can boost their competitiveness, and relevance, and expand their market share in volatile conditions.
These complementary partnerships and strategic alliances are increasingly permeating the hospitality sector since they allow players to exploit opportunities while directly contributing to customer satisfaction (Elche, Garcia-Villaverde, and Martinez-Perez, 2018; Kim and Shim, 2017). Therefore, information sharing between Expedia and Booking.com can increase competitiveness and reinforce their market position by providing seamless services to travelers.
Identifying Common Friction Points and Developing Solutions
Creating seamless and frictionless service delivery systems for travelers commences with identifying the areas, which cause the consumer to hesitate or completely abandon their buying decisions. Indeed, exceeding customer expectations after an issue transpires is not as good as making several trials and test runs to ensure the systemsâ optimal functionality. According to Mitchell (2019), Booking.com executes thousands of experiments daily to identify the specific areas the customers would want to be improved. Among the prominent concerns are the protracted delays to consumer messages by the property owners (Mitchell, 2019).
Since this is an industry-wide challenge for online travel agents, they can collaborate in developing highly interactive sites that support instantaneous messaging and engagement. Thus, Booking.com and Expedia should collaboratively pursue the development of platforms and systems which anticipate consumer challenges and addresses them before they frustrate customersâ efforts to make purchase decisions.
Potential Challenges Faced by Expedia and Booking.com due to Covid-19
The outbreak of the highly infectious Covid-19 pandemic hit the hospitality industry severely as countries imposed various measures to mitigate the spread of the disease. Most jurisdictions responded by installing travel bans, complete or partial border closures, social distancing, and shelter-in-place orders. These regulations and guidelines effectively rendered the hospitality dysfunctional, at least for the short term. However, as the pandemic evolved and reached its peak point, it increasingly became evident that it had changed the world enormously with little likelihood of reversion. Additionally, as normalcy slowly resumed, it was clear that the industry would be among the last to recover (Davahli et al., 2020).
Notably, the numerous incidences of re-emerging waves of infections and new virus variants worldwide continue to dampen the possibility of the sectorâs full recovery (Biwota, 2020). As the world awaits the return to normality, numerous potential challenges could impede the full recovery of the hospitality industry.
Among the notable markets for the sector were corporate and business events. Following the disruptions occasioned by the pandemic, organizations increasingly leveraged the technology to execute operations that previously utilized the services and platforms of online travel agencies. These developments allowed businesses to make huge savings and adopt technology as the preferred and effective mode of holding conferences, meetings, and other corporate events. In this regard, the Covid-19 pandemic has contributed immensely to the emergence of new technologies, which have significantly eliminated the need for corporate travels, business meetings, and other events which previously utilized these online platforms.
Further, the Covid-19 pandemic has had detrimental impacts on numerous economic segments, rendering millions of people jobless, wiping out savings, and definitively eroding their financial wellbeing. As a result, the demand for hotel bookings, vacations, and excursions dropped sharply, thereby affecting the bottom lines of Expedia and Booking.com. Although some economic activities may be slowly recovering from the effects of the pandemic, people may reconsider their expenditure habits and prioritize savings over making luxury expenditures. This implies that the Covid-19 pandemic has prominently reduced the desire for leisure travels and hedonistic getaways (Kaushal and Srivastava, 2021). This is a major challenge to online travel agents due to the lifestyle changes which have reduced the demand for vacations and excursions.
Innovative Post-Covid-19 Marketing Strategies and Approaches to Attract New Customers and Retain the Existing Clients
As the world slowly recovers from the disruptive effects of Covid-19, it is imperative for organizations to devise innovative marketing to attract new customers and ensure the retention of the existing ones. In this regard, Booking.com and Expedia can develop effective post-Covid-19 strategies to keep their businesses afloat. For instance, online travel organizations can initiate efforts to oversee a robust localization of experiences to expand and invigorate their connections with consumers.
Notably, the near-total travel shutdown alongside other lockdown constraints has escalated the significance of local neighborhoods. In this regard, Expedia and Booking.com can reap enormous benefits by localizing their marketing strategies. This strategy will be effective since it will allow consumers to use the service without the need to travel, thereby achieving a tradeoff between standardized products and local appeal (Nguyen, 2016). Thus, this approach will enable the two firms to stand out from other players while blending in with the local people.
Additionally, Booking.com and Expedia can create products and services which simultaneously promote health and affordability. The Covid-19 pandemic has permanently adjusted peoplesâ concerns and elevated the priority for personal health and economic wellbeing. This implies that the future of the hospitality industry will be determined by the playersâ ability to promote safe traveling, vacations, and excursions without hefty financial implications for the consumers. For instance, Booking.com and Expedia can coordinate with suppliers to rethink a broader range of products and services and commit to higher standards.
Kaushal and Srivastava (2021) assert that negotiations with suppliers, such as residential property owners, can help achieve mutual sustenance while allowing users to enjoy discounted rates. Moreover, there can be periodic offerings of exclusive deals and promotions geared to bring new users onboard and encourage spending by the old clients. This strategy will help to retain the existing customer base and attract new users.
Online travel agents can initiate customer loyalty programs through which they would extend discounts on future purchases and allot redeemable points. For instance, new users of Expedia and Booking.com platforms can be entitled to an extra free day of accommodation after their first successful booking, with the initial vacation earning double loyalty points. According to La Rose and Rowson (2017), implementing this marketing scheme is critical in attracting customers to experience its products. It is also effective in encouraging repeat bookings and retaining customers.
PESTLE Analysis if Possible Challenges for Booking.com in Introducing New Products Post-Covid-19
Developing new products and services is critical to the survival and growth of Booking.com post-Covid-19. However, the introduction of the offerings is a risky and challenging undertaking due to the influence of external factors. Although the firms have a comprehensive understanding of the customers regarding their buying behaviors, price sensitivities, and preferences, other extraneous elements can determine the success or failure of the products, regardless of the marketing proficiency. These factors include political, sociological, environmental, economic, legal, and technological. PESTLE analysis can provide valuable insight into the various potential challenges to guide the organizationâs strategic decision-making.
PESTLE Analysis
Political factors such as governmental regulations, trade restrictions, and tax policies are likely to impact new products. For instance, the imposed health guidelines and regulations may compel the agency to only allow bookings for up to 60% occupancy of hotels and residential accommodations (Dahvali et al., 2020). Additionally, the government may require the organization to ensure suppliers adhere to various protocols, including obtaining a commitment from property owners to promote the safe use of their facilities. Moreover, the imposed travel restrictions and constraints could impede the successful uptake of the new product by consumers.
From an economic perspective, factors such as credit availability, enhanced priority on savings, plummeting unemployment, and the rising cost of living could impose a significant challenge to the firm. This implies that the organization will be compelled to extensively discount the products due to the adversarial economic consequences of Covid-19. This is closely associated with sociological factors, particularly regarding health issues and safety concerns of the members of the public. Although the product may be innovative and marketed proficiently, the intermittent nature of Covid-19 infections, the emergence of new variants, and people’s growing concern for their wellbeing will pose a major challenge to the firm.
Environmental factors such as the increased need for the promotion of safe Covid-19 compliant practices are external components that will directly influence Booking.comâs introduction of the new products. For instance, organizations are increasingly adopting supply chain intelligence and contactless service delivery as a strategic approach to mitigate the spread of highly infectious diseases. In this regard, it is imperative for Booking.com to explore how customers can safely take vacations without exposing themselves to the virus.
Similarly, legal factors, including the limitation of the collaborative effort between suppliers and the service provider due to possible infringement of anti-trust laws, price-fixing, and the potential abuse of its dominant market, are critical. The emergence of disruptive technologies, such as the development and emergence of platforms by hotel owners to directly engage customers, which are increasingly gaining momentum, will impact Booking.comâs products.
Although introducing the new products into the market is integral to business growth and survival plan for Booking.com, the PESTLE analysis reveals numerous challenges that the company is likely to face. However, the insights obtained from evaluating the external influences are critical in formulating informed decisions and policies. Although the new product is innovatively developed, the political, legal, environmental, political, sociological, and environmental factors will pose various challenges to introducing the new offering into the market.
Conclusion
Booking.com and Expedia are leading and dominant players in the hospitality industry, particularly in the online travel agency business. Although these organizations have increasingly provided innovative customer services, they still experience challenges in creating seamless and frictionless customer experiences. However, they can integrate intrapreneurship into their respective organizational cultures to ensure they remain relevant and active. This strategy can also help the organizations reinforce their market position due to its differentiation aspect, which will enhance their competitiveness.
The industry in which the two firms operate has been adversely affected by the Covid-19 pandemic, primarily through travel restrictions, a declining market, and customersâ unwillingness to spend on luxuries. However, the adoption of creative marketing strategies and new products can assist Booking.com and Expedia to attract new consumers and retain the existing client base.
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