Why Booking.com is listed on the flight metasearch engine Flygresor.se?

I have noticed that the Booking.com brand is appearing as listed on Swedish flight-meta Flygresor.se. This is somewhat unique because Booking.com isn't appearing as listed on any other flight-meta in Sweden, or elsewhere. Bear in mind, it makes no sense to have Booking.com brand displayed on Flygresor.se if there is no reason for doing that. So there must be a reason - Quid pro quo. But it could also be as making a mountain out of a molehill.

What is a flight-meta as flygresor.se doing? Referrals to flight-OTAs. Listing as many flight-OTAs as necessary and using the strength of all flight-OTA brands together to win the game over individually strong flight-OTA brands. And in that way, the individually strong flight-OTA brands diminishing in oblivion. Flight-meta is at the top of the food chain (selling plane tickets) - the alpha male. Thus, marketing/branding work for flight-meta, but irrelevant to all subordinates (flight-OTAs) in the system. Momondo, Skyscanner, Kayak, Wego, and Aviasales are also flight-meta.

What is a flight-OTA (Online Travel Agency) doing? Selling plane tickets listed on flight-metas, they could also sell packages, cruises, buses, trains, hotels, rental cars, and ferries etc.

Flygresor.se and Momondo.se are by far the biggest flight-metas in Sweden. The flight-meta Momondo (Kayak) is owned by Booking Holdings. Booking.com is not listed on Momondo. Flygresor.se is owned by Etraveli. Etraveli manages Booking.com flight bookings.

Some Flight-OTAs have decided to not participate in Flygresor.se because of various reasons

• It's too expensive. They have a hefty CPC (cost per click).
• It's owned by Etraveli. The biggest flight-OTA in Scandinavia. It irritates some competitors.
• Etraveli fills up flygresor.se with their own flight-OTA brands. All flight-OTAs in the above listing is owned by Etraveli except Booking.com and Travelgenio (Otravo). And Etraveli manages Booking.com flight bookings.

Of course, there is a backside as flight-OTA to not participate in Flygresor.se. As flight-OTA, you need flight bookings to survive. Flight-meta is by far the biggest channel for flight-OTAs to acquire flight bookings. 95% of all flight bookings are from flight-metas as flygresor.se and Momondo.se. So as flight-OTA, it’s a catch22 logical dilemma to not participate in flight-meta. Of course, there are other marketing channels like social media, newsletter and Adwords etc, but those channels contribute only to a very small fraction of the overall revenue. It's not worth the effort, it only causes crowd out effects within the company with its turfs and territories to protect. Every department/territory within the flight-OTA must have their fair part of the cake so there is nothing left to make any bridgehead on the flight-meta beach. A flight-OTA doesn't have the luxury to entertain with Instagram-posts if the flight-OTA suffering heavy artillery fire from flight-OTA competitors on flight-meta. Many flight-OTAs make the mistake that they spend too much time on corporate bullshit bingo (irrelevant and unnecessary marketing and other meaningless stuff) activities that cause crowd-out effects to achieve great results where the customers are - flight-meta (for example flygresor.se). But one thing we know for sure - price is king. That is a strong reason why consumers are attracted to flight-meta sites as Flygresor.se - find a bargain offer. So what's relevant marketing for flight-meta is likely irrelevant and unnecessary for a Flight-OTA. Instagram, blogging, Adwords, Facebook, and radio-ads etc. Why? Because flight-meta is at the top of the food chain (selling plane tickets) - the alpha male. The successful flight-OTAs piggyback on this answer.

The flight-OTA competition itself, that is unfolding between flight-OTAs on flight-metas contributes to the growth of flight-metas as Flygresor.se, Skyscanner, Kayak, Momondo, and Wego etc. And there is no way out of this trap (dependency) for flight-OTAs. Of course, the airlines could remove flight-OTAs ticketing rights so this particular avenue of pleasure of flight-OTAs acquiring bookings through flight-meta is closed off. But then the airlines have to deal with all low-value customers that are only looking for the lowest price on flight-metas. The Flight-OTAs customers are anyway "low-value customers" for airlines - these customers are notoriously unfaithful against airlines brand. And these customers are also notoriously unfaithful against flight-OTAs.

What reasons could it be that Flygresor.se listing Booking.com?

• Strengthen Flygresor.se brand with Booking.com because some flight-OTAs are so "complicated" that they do not want to participate on Flygresor.se.
• Strengthen Flygresor.se market position with Booking.com super strong brand. Flygresor.se competes against the flight-meta Momondo (owned by Booking.com). Momondo has more flight-OTA suppliers than Flygresor.se. To add Booking.com brand gives Flygresor.se more flight-OTAs in their listing. But it's pretty strange when Flygresor.se strongest competitor is Momondo.se that is owned by Booking Holdings. Of course, Etraveli manages Booking.com flight bookings and Etraveli owns flygresor.se, but it's anyway a bit strange. Even if it makes some sense.
• Testing or no particular reason, see what happens and learn. Then maybe roll-out Booking.com globally on all flight-metas. It's in the interest of Etraveli to strengthen flight-metas positions on all markets. Piggyback on Booking.com and flight-meta, and also piggyback on flight-OTAs that are listed on flight-metas and are occupied with irrelevant marketing activities that make them less competitive on flight-meta. The top 3 listed flight-OTAs catch 80% of the flight bookings on flight-meta.
• To impress on Booking Holdings so Etraveli can get acquired by Booking Holdings. Some sort of dating ritual. Important to pay your date attention. And Booking Holdings also pays the date attention (see link).
• Embellish Flygresor.se with Booking.com brand in the listing to gain attractiveness for a potential buyer of Flygresor.se except for Booking Holdings. I guess there is no buyer at the moment, but you never know what happens in the future. It's important for Etraveli to set the stage if they want to be acquired by Booking Holdings. If Booking Holdings owns the biggest and 2nd biggest flight-meta and also the biggest flight-OTA together with duopoly with Expedia regarding accommodation in Sweden that might catch the European Commission eyes and the competitors won't mince their words. It might be sensitive matters.
• Mentally preparing competitors that Booking Holdings might acquire Etraveli. So when the takeover really happens it's more or less only a formality, the cooperation is in many ways already in place.

Trip.com owns Travix and Skyscanner (see link). But Travix didn't own the biggest or 2nd biggest flight-meta in the Netherlands or elsewhere when they were acquired by Trip.com, so if Etraveli sells Flygresor.se they are in a bit stronger position to be able to get acquired by Booking Holdings. It's only for Etraveli to refer to the Trip.com deal. Google Flights emerging position might also put Etraveli in a better position to be able to be acquired by Booking Holdings. And it's nothing particular that Flight-OTAs own a flight-meta. Why not the other way around? Booking Holdings has already has acquired Momondo/Kayak, so why not acquire the successful flight-OTA Etraveli? Booking Holdings has Priceline, but Priceline is only based in the USA. Some sort of US version of Expedia.

The Flight-OTA centric business model

The flight-OTAs Etraveli, Otravo, and Travix have a similar business model - outsource marketing to flight-meta, embrace flight-meta as something good, and then the Flight-OTAs run the show behind the scenes. Succesful flight-OTAs don't see themself as Travel Agencies, more as running as many transactions as possible as profitable as possible. The booking process is for the customers like a well-considered Navy Seals obstacle course, and sometimes not (facilitated booking). But this is with purpose, it's about applying Game Theory in economics and Microeconomics - as flight-OTA you should give away as many as possible of the unprofitable customers to your competitors and keep the profitable customers. Competitive flight-OTAs are hawk-eye focused on selling airplane tickets on flight-meta and that all processes behind the scenes are working like an atomic clockwork. And also have in mind that an organization that works as an atomic clockwork might hurt the company innovation and creativity. If the flight-OTA is aware of the contradictions it shouldn't be a problem.

Succesful Flight-OTA abolishes and dismantles everything distracting and decoy the core business. This sounds easy? It isn't. Build the right organization suited for the purpose is associated with difficulties when the flight-OTA already has an organization with its departments, territories, and turfs that cause crowd-out effects. Companies are sometimes hostages of their own organization. What should the company do? Throw their employees under the bus? The employees are an organization's biggest assets but also its own kidnappers.

Since Etraveli changed CEO in the mid-'10s they have made a remarkable refurbish of the company - hawk-eye focus on selling airplane tickets on flight-meta globally. It is impressive by Etravelis CEO to have managed to change the path of the company because it's hard. Often CEOs don't have the guts to change the path of a company. And why should they? Making noise and fuss only make the CEO unpopular by his/her staff. The CEO will anyway get his/her big paycheck each month, and if the company fails it's only to go to the next company as CEO. And do the same mistakes again.

"It must be remembered that there is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than a new system. For the initiator has the enmity of all who would profit by the preservation of the old institution and merely lukewarm defenders in those who gain by the new ones."

Niccolò Machiavelli

The core-business/assets with Flight-OTAs are tech, contracts, collective intelligence, synergy, the thinking, mindset, available inventory, and processes - not the brand (irrelevant). Then they outsource marketing to flight-metas and much of customer service to call centers (the flight-OTA only supports the tech).

Selling airline tickets are a low margin industry so to manage this profitably the flight-OTA needs huge numbers of flight-bookings to reach the critical mass where it will become profitable. When the flight-OTA makes the insertion on flight-meta, it has to be done with a full house hand and globally because the competition between flight-OTAs on flight-meta is like playing poker with different and many sets of cards with robots with a great portion of Game Theory in Economics. Then it's important to have hawk-eye focused on the core business.

Many Flight-OTAs still live in the old perception that the travel-agency should be some sort of big potluck party business mishmash multi-travel agency with rental cars, flights, hotels, packages, cruises, holidays, skiing etc. And then, of course, a mishmash of marketing channels - Adwords, TV, blogs, radio-advertisement, link-building and social media etc. Then the flight-OTA will not shine anywhere, only disappear in the oblivion of the chaos and anarchy on the internet. Chaos in the world brings uneasiness, but it also allows the opportunity for creativity and growth.

"The Internet is the first thing that humanity has built that humanity doesn't understand, the largest experiment in anarchy that we have ever had."

Eric Schmidt

What's the point for Booking Holdings to acquire Etraveli? They could cross-fertilize each other which will create synergies with a very positive cumulative effect. Etraveli is great at acquiring booking through flight-meta and Booking Holdings already owns the successful accommodation site Booking.com and the flight-meta Kayak/Momondo. Booking Holdings will own more stages of production. Etraveli anyway gets the vast majority of their bookings from flight-metas. Just the same reason why Trip.com owns Travix (Budgetair) and Skyscanner. And why Etraveli owns the flight-meta Flygresor.se in Sweden. Flight-OTA competitors in Sweden pay Etraveli for referrals through Flygresor.se where they also compete against Etraveli flight-OTAs. That's just priceless. Trip.com does it already on a globally with Travix and Skyscanner, so why not Booking Holdings with Kayak/Momondo and Etraveli? And Booking Holdings has invested in Trip.com.

Example of positive synergy effects

• Booking.com and Etraveli can cross-sell and share customer base with offers the other part that the customer lacks.
• Booking.com gets really good data from Etraveli, they know where people travel, how many they are, length of stay, and what if the same email address was already in their database - then they can also adapt the offer to specific customers based on history.

Actually, I don't think it's much of a problem for Booking Holdings to acquire Etraveli regardless of Flygresor.se - but the competitors won't be pleased. In my mind, a company should please their owners not to please their competitors.

"I cannot give you the formula for success, but I can give you the formula for failure - which is: Try to please everybody."

Herbert Bayard Swope

Of course, it's risky to do as Etraveli and only focus on acquiring flight booking through flight-metas. What happens if the market dynamics change? But, nevertheless, Etraveli business model is the least bad. Diversity (multi-OTA) often means less risk, but the problem is growth and competitiveness. - "There are differences of degree in hell". If changing strategies don't help, you can try to change the game. And if that's not possible, you can at least exercise some control about which games you choose to play. The road to hell is paved with intractable recursions, bad equilibria, and information cascades.

History of the Flight-meta war between Flight-OTAs

In the mid-'00s the local Scandinavian flight-OTAs found a sweet spot to outrival the flight-OTAs in Scandinavia that were acquired by the major US flight-OTAs at that time. The sweet-spot was in flight-meta. Resfeber was acquired by Travelocity and Mrjet was acquired by Orbitz. All these four companies have ended up in oblivion. One of several reasons is that they couldn't handle the flight-OTA flight-meta wars in Scandinavia (see below chart). A good example of long chains of command could cause immense difficulties for flight-OTAs.

Picture text: In the mid-'00s other flight-metas were bigger in Sweden than Momondo. (Flygresor.se (means air-tickets) is not a "unique word" so it's not suitable for a Google Trends analysis for this purpose). The flight-meta Reseguiden is still quite big but hasn't kept pace with the big cheeses as Momondo and Flygresor.se. From the chart it easy to see; if Flight-OTAs want to sell plane tickets, they do it through flight-meta and not branding. Branding is something flight-meta should pay huge attention to. And the chart looks similar or has resemblances on many markets globally.

The flight-meta war began in Scandinavia in the mid-'00s. Then the flight-metas have spread across the globe with Skyscanner, Wego, and Aviasales etc. That is why Etraveli is so good at flight-meta wars - it began in Scandinavia. Etraveli can take advantage of their knowledge from the Scandinavian market and apply it on a global basis. Etraveli initial plan, before they changed CEO, seemed to become the northern Europe resemblance of Odigeo group (Edreams) with a branding strategy.

Etraveli had before they changed CEO great improvement potential as flight-OTA on flight-meta. It was the current CEO of Etraveli that executed the improvement potential to real business success. Previously Etraveli didn't make any improvement as flight-OTA on flight-meta because they didn't need to, they acquired every flight-OTA that had some potential in the subject. First Etraveli acquired as many successful Scandinavian flight-OTAs and in that way make flight-meta irrelevant. Of course, then it was easy for Etraveli to live in the same illusion as the French Royal Family at the Palace of Versailles. But when Etraveli acquired 1 flight-OTA, 2 new flight-OTA competitors emerged on flight-meta - so that plan wasn't so successful. It only fuels the flight-meta market itself, but that it's in the interest of some Flight-OTAs especially if the flight-OTA understands the market patterns. And these flight-OTAs are individually together is far stronger than Etraveli, more or less regardless of which flight-OTAs Etraveli acquires.

It seemed as Etraveli, before they changed CEO, suffered from the Functional Stupidity Paradox (see link) and Parkinson's Law of Triviality - an observation about the human tendency to devote a great deal of time to unimportant details while crucial matters go unattended. Etraveli seemed to spend a huge amount of time with irrelevant marketing activities as newsletter, Adwords, radio advertisement, link-building, and packages etc when I presume 80-90% of their bookings were generated from flight-meta even before they focused on the matter. It's important to look at how the market dynamic works and not how the market dynamic should work. And have no utopian illusion standpoint to the current state of affairs. It's important to follow the Pareto principle. "If 80% of your sales come from 20% of your clients, you would be better off focussing more time on them". Since Etraveli changed CEO they seem to applied a similar approach regarding their strategy and therefore now in a much better global competitive position. In my mind, it's an impressive change by Etraveli.

It took Etraveli many years and a change of CEO until the penny dropped regarding flight-OTA and flight-meta. After Etraveli changed CEO, in the mid-'10s, the company got on the right path.

Since the new CEO of Etraveli took over the company, they have also made much better acquisitions - Tripstack and Mytrip. Acquiring intellectual property and adding new market presence, not acquiring flight-OTA brands where all bookings came from flight-meta and Etraveli already has a presence.

Previously Etraveli had the Odigeo group (Edreams) branding strategy approach that doesn't work. See the below screenshot for why - (Opodo is an Odigeo group brand in Germany). The strategy is like battling a two-front war.

• Opodo gets battled by Flight-meta/LCC regarding flights.
• Opodo gets battled by Hotels.com/Booking.com/Airbnb regarding accommodation.

And packages? It makes no sense unless you are TUI (or similar) and can add tremendous value to your product. Or do as Booking Holdings might do - might acquire Etraveli. Then Booking Holdings will own the strongest accommodation GDS (Booking.com) and the strongest flight-OTA (Etraveli) on flight-meta (Booking Holdings owns Momondo/Kayak). And where are the customers booking flight tickets? A huge amount goes to flight-meta as Skyscanner, Kayak, Aviasales, Finn.no, idealo.de, and Momondo etc.

When the margins for flight-OTAs shrinking because flight-meta acts as a battlezone for flight-OTAs, the flight-OTAs try to compensate for this matter with more efforts in package and accommodation deals with higher margins per unit. But if the flight-OTA applies this approach it only makes the situation worse for flight-OTAs because it's not Pareto principle optimal. The accommodation inventory in the package is anyway likely from Booking.com or Exepdia.com (Hotels.com) which have marketing budgets that all flight-OTA only can dream about. It's an impossible battle to win for flight-OTAs, unless specializing in a niche.

"It's important to learn from your mistakes, but it is BETTER to learn from other people's mistakes, and it is BEST to learn from other people's successes. It accelerates your own success."

Jim Rohn

When Etraveli current CEO took over the company it seems as they just did as above quoted. Especially it's interesting, who learned and gave inspiration to Etraveli success? I would say it was "the former CEO of Travelpartner together with MrOrange". Etraveli actually acquired both companies in the year 2010 in the same deal, but the "CEO of Travelpartner together with MrOrange`s" thinking, mindset, and knowledge were never implemented in Etraveli because of reasons (some of the reasons mentioned in my article). Previously Etraveli seemed to treat flight-meta as something necessary evil, and a traffic channel among others. And MrOrange was sold back to their previous founders by Etraveli because of reasons (that is another story). MrOrange together with the CEO of Travelpartner has/had a very strong intellectual property as Flight-OTA acquiring bookings through flight-meta, but it was never utilized by Etraveli (some of the reasons mentioned in my article). Etraveli had to employ a new CEO before "the CEO of Travelpartner together with MrOrange" approach was reinvented and dusted off by Etraveli. Maybe it was only good to wait for Etraveli, then Etraveli could learn even more from some other flight-OTAs mistakes and their own mistakes. Business success comes from being in the right spot at the right time. And a condition for Etraveli current business model to work is that flight-meta grows and it stays so.

Well-done by Etraveli CEO to put the company on the right path. Peak performers see the ability to manage change as a necessity in fulfilling their missions. Outstanding work!

P.S. - First time reading my posts? Thanks for taking the time to stop by! If you enjoyed reading this article, you may also like:

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