Hotels.com: Data Informed & Analytics Led Model of Business

Last night Cardiff Business School hosted, Mr David Roche, President of Hotels.com for an evening lecture about the Internet: Business, not as you know it! David introduced the audience to the data-informed and analytics led business model of Hotels.com.

It was an interesting talk that took us from the business model origins of Yahoo!, Google and Goto.com to the power of and the loss of the high street travel retailer. In 1998 Yahoo! dominated the search business. However, by 2001/2002, who would have thought that it was the combination of a citation ranking algorithm, coupled with a pay-per-click business model and data informed decision making that would see Google evolve to who they are today, one of the most powerful multinationals and Internet businesses today.

David, reviewed the power of digital analytics for Hotels.com, wherein the value of the footprint through their and partner sites (e.g., tripadvisor.com) and advancements in industry back end systems (e.g., Sabre), has provided for advanced empirical evidence in managerial decision making in site design, pricing and service offering. Data-informed and analytic led Internet business is the business of the Internet today, and not as many really know it.

When asked about the impact of the financial crisis for Hotels.com, he revealed that the traffic data at Hotels.com shows evidence of CFO’s cutting corporate travel budgets resulting in less traffic from these segments and a squeeze on hotel ‘price per night’. However such economic conditions are in contrast driving individual consumers online for hotel bookings due to increased choice wherein the average consumer scans a minimum of 3 sites for options at any one time, lower geographic barriers for information access and advanced price competitiveness. All resulting in increased consumer choice.

However one thing that David did touch on during the Q&A, was that, in contrast to the more traditional offline travel agent or the smaller online business, large Internet businesses, such as Hotels.com and Google do have an advantage. Something that is referred to in academic circles as ‘double jeopardy’ when talking about the power of large brands, is they have large data sets of traffic data from which to draw and teams of analysts with whom to work with. For the high street travel retailer or smaller internet business site usage and traffic data is not as reliable or large enough for any advanced statistical analysis, resulting in differing approaches in methods for research insight (e.g., focus groups), and the use of free service tools such as Google Analytics.

During his talk David raised a number of interesting points about data-informed and analytic led managerial decision making for the Internet business, but more importantly he raised a questions about skills and in digital analytics. How and what are universities and educational providers delivering in terms of skills and to ensure graduates and wider society have the necessary skills to participate in a data-informed and analytics led model of Internet business?

An enjoyable and very informative talk.

Smiles Kelly
:-)

P.S. For tweets from the event, see: #cbslecture

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