The question Using the figure above draw channels of distribution diagram for Expedia and price lines what do you notice about the structure of each company Case Study - The Priceline Group and Expedia Inc.Both companies earn revenue via three business models:Since the late 1990s, travel distribution has seen a considerable shift from offlineAgency model: Suppliers determine the selling price for their availableinventory and display it on the OTA's website(s). The customer makes abooking and details of the booking are made available to the supplier. Onarrival the customer pays the supplier direct, and the supplier then pays theOTA the agreed rate of commission on the booking. Commission rates aretypically between 10-30 per cent (Xotels, n.d.).• Merchant model: Suppliers negotiate a net rate with the OTA, who thenadds their own mark up and determines the selling price. Capacity may bedynamically packaged with other travel components (e.g. flight, hotel or carrental). The customer pays the OTA at the time of booking, and the OTAto online channels. Many entrepreneurs who were quick to recognise thepotential of new technologies have since become major travel intermediaries.Priceline.com was originally set up in 1997 as a travel auction site whereconsumers offered a price and traders chose whether or not to accept it. In 1999the company was offered for public sale and valued at US$12.9 billion. Since2004, The Priceline Group has acquired several online travel retail sites:Booking.com (2005), agoda.com (2007), Traveligsaw (now rentalcars.com; 2010),KAYAK (2013), OpenTable (2014), Rocketmiles (2015). In addition it acquiredreservation-management technology companies that provide revenue andmarketing solutions to hotels or restaurants that sell via Booking.com orOpenTable: PriceMatch and AS Digital (2015). The Priceline Group operates sixbrands, employs 18,500 staff and operates in 224 countries. In 2016 it handledpays the supplier at a time agreed in the contract.• Advertising model: Travel and non-travel advertisers display content on theOTA's websites to gain access to the OTA's viewers, and then pay the OTAfor click throughs. The OTA's metasearch sites, KAYAK (Priceline) andTrivago (Expedia), earn referral fees from other travel companies when acustomer clicks through from the OTA site to the advertiser's website.US$68.1 billion in gross bookings (The Priceline Grou,p 2017).Figure: Channels of distribution in the tourism systemSUPPLERS CAPACITYTransportoperatorsseotsAccommodationoperolorsrooms/propertesAtroctionoperalorscketsNon-residentelvenuer spoceCrusecompanescabins Figure: Channels of distribution in the tourism systemSUPPUERS CAPACITYTransportoperatorsseatsAccommodationoperatorsrooms/propertiesAttractionNon-residentialvenues' spaceCruiseoperatorsficketscompaniescabinsVia salesoffice orwebsiteOftenvia GDSsystemWHOLESALERTOUR & MICE OPERATORAGENCYVia soles office or websiteCUSTOMER

Answered: The question Using the figure above…

The question Using the figure above draw channels of distribution diagram for Expedia and price lines what do you notice about the structure of each company

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter16: Government Regulation

Section: Chapter Questions

Problem 1.1CE

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