Okay, but there's some kind of moat there. Contracts/long standing relations w/ hotels may be one. I know that craft beer producers are complaining about how most bars sign long contracts with the giants in the game, which keep them from selling other tap beer. I would think that this is a pretty common thing.
However, I would think that brand name has something to do with both of these things. If you're a bar, you want some well known name beer brand on the sign outside your bar, since people recognize the name and will want to buy beer when seeing it. If you're a hotel, you want to work w/ Booking.com, Hotels.com et al, since they are the places people go looking for hotels.
We don't have to do squat, so that bit is OK, but if I were more involved in the revenue and profit generation fighting these commission taking fiends would be a major goal.
There's your reason, I'd reckon...
But only keeping 10 % of profits (and 90% going to middlemen...?) seems to me very very little indeed. If I were you, I'd try that Expedia-killer idea of yours!
Markets aren't all that efficient sometimes. I do not claim to know the exact reason, but I'd think that if there were an easy way to disrupt Booking.com, someone would've done it by now. After all, they've been doing close to 30 % net profit for at least 10 years. That smells of monopoly, or at least a pretty massive moat, not a commodity type business. I don't think it's as easy as "they've locked the hotels into horrible contracts". There are probably some more enduring, more fundamental advantages that these companies enjoy, it seems to me. |
