Skyscanner is a metasearch engine and travel agency founded by information technology professionals Barry Smith, Bonamy Grimes, and Gareth Williams. The idea for the platform came after Williams experienced difficulty in finding cheap flights to ski resorts.
Skyscanner earns the bulk of its revenue via commissions from its various car hire, hotel, and airline partners. Whenever a consumer clicks a search listing or makes a purchase, the company is compensated.
Skyscanner offers its API to similar platforms wishing to access its data. While the company offers this service for free, it likely retains the right to collect any commissions that result. Skyscanner also sells insurance to travelers and collects a referral fee for every new policy that is created.
Business Model Element
Analysis
Implications
Examples
Value Proposition
Skyscanner’s value proposition includes: – Flight Comparison: Offering users a platform to compare flights from various airlines and booking sites to find the best deals. – Hotel and Car Rental Comparison: Providing the same service for hotels and car rentals, allowing users to find the most suitable options. – Travel Planning Tools: Offering tools like fare alerts and price tracking to help users plan their trips and save money. – User-Friendly Interface: Providing an easy-to-use platform with a user-friendly interface that simplifies the travel booking process. Skyscanner appeals to travelers seeking convenience, cost savings, and comprehensive travel planning tools.
Attracts travelers looking for the best deals on flights, hotels, and car rentals. Assists users in planning their trips effectively. Encourages loyalty by providing valuable fare alerts and price tracking. Offers a user-friendly experience for hassle-free travel booking. Provides a unique value proposition in the travel search industry.
– Searching for and comparing flight options. – Finding suitable hotels and car rentals. – Using travel planning tools like fare alerts. – Enjoying a user-friendly travel booking experience.
Customer Segments
Skyscanner serves the following customer segments: 1. Leisure Travelers: Targeting individuals and families planning vacations and leisure trips. 2. Business Travelers: Providing options for professionals traveling for work purposes. 3. Travel Agencies: Partnering with travel agencies that use Skyscanner’s platform to book travel for their clients. 4. Travel Enthusiasts: Catering to frequent travelers and enthusiasts seeking the best travel deals. Skyscanner caters to a diverse range of customers, including leisure and business travelers, travel agencies, and travel enthusiasts.
Targets a wide range of travelers for leisure and business purposes. Collaborates with travel agencies for broader reach. Appeals to frequent travelers and enthusiasts seeking travel deals. Diversifies its customer base within the travel search industry.
– Leisure travelers planning vacations. – Business travelers booking work-related trips. – Travel agencies using the platform for client bookings. – Travel enthusiasts seeking the best travel deals.
Distribution Strategy
Skyscanner’s distribution strategy includes: – Online Platform: Operating an online platform and mobile app where users can search and book flights, hotels, and car rentals. – Partnerships: Collaborating with airlines, hotels, car rental companies, and online travel agencies (OTAs) to provide users with a wide range of options. – Affiliate Marketing: Partnering with affiliate websites and travel-related platforms to expand its reach. – Mobile App: Offering a mobile app for users to search and book travel on the go. Skyscanner combines its online platform, partnerships, affiliate marketing, and mobile app to distribute its services.
Provides users with an online platform for convenient booking. Collaborates with industry partners to offer a comprehensive selection. Expands its reach through affiliate marketing and partnerships. Offers a mobile app for on-the-go travel planning and booking. Implements a multi-faceted distribution strategy in the travel search industry.
– Using the online platform or mobile app for travel searches. – Exploring options from various airlines, hotels, and car rental companies. – Discovering Skyscanner through affiliate websites and platforms. – Booking travel on the mobile app while traveling.
Revenue Streams
Skyscanner generates revenue through the following channels: 1. Cost-Per-Click (CPC) Advertising: Earning fees from airlines, hotels, car rental companies, and OTAs when users click on their offers through Skyscanner’s platform. 2. Affiliate Marketing: Receiving commissions from affiliate partners for traffic referred to their platforms. 3. White-Label Solutions: Offering white-label travel search solutions to other websites and platforms for a fee. 4. Display Advertising: Displaying ads on its platform and generating revenue from advertisers. Skyscanner diversifies its revenue streams through CPC advertising, affiliate marketing, white-label solutions, and display advertising.
Collects fees when users click on offers from travel providers. Earns commissions through affiliate marketing partnerships. Offers white-label solutions to websites and platforms for a fee. Generates revenue from display advertising on its platform. Diversifies income sources within the travel search industry.
– Revenue from cost-per-click advertising. – Commissions earned through affiliate marketing. – Fees for white-label travel search solutions. – Income from display advertising on the platform.
Marketing Strategy
Skyscanner’s marketing strategy involves: – Search Engine Optimization (SEO): Optimizing its platform to rank high in search engine results for travel-related queries. – Content Marketing: Creating informative travel guides, articles, and blog posts to attract and engage users. – Mobile App Promotion: Promoting its mobile app to encourage on-the-go travel booking. – Partner Promotions: Collaborating with airlines, hotels, and other partners to promote special deals and offers to users. Skyscanner utilizes SEO, content marketing, mobile app promotion, and partner collaborations to reach and engage travelers.
Enhances visibility by optimizing search engine rankings. Provides valuable travel content to attract and inform users. Encourages mobile app usage for convenience. Collaborates with industry partners to promote special offers. Implements a comprehensive marketing strategy in the travel search industry.
– Discovering travel options through search engine results. – Reading travel guides and articles on the platform. – Using the mobile app for travel bookings. – Accessing special deals and offers promoted by partners.
Organization Structure
Skyscanner’s organizational structure includes: – Executive Leadership: Comprising executives responsible for strategic direction and decision-making. – Technology and Development Teams: Managing the platform’s technology, development, and user experience. – Partnerships and Business Development: Collaborating with airlines, hotels, and other industry partners. – Marketing and Content Teams: Handling marketing, content creation, and user engagement efforts. Skyscanner maintains an organized structure to support technology development, partnerships, marketing, and user experience.
Led by executive leadership for strategic guidance. Manages technology development and user experience. Collaborates with industry partners for a wide range of options. Focuses on marketing and content to engage users effectively. Maintains an organized structure aligned with its mission in the travel search industry.
– Executive leadership for strategic direction. – Technology and development teams. – Partnerships and business development teams. – Marketing and content teams.
Skyscanner is a metasearch engine and travel agency founded in 2003 by information technology professionals Barry Smith, Bonamy Grimes, and Gareth Williams. The platform, which is available in over 30 languages, enables travelers to research and book travel-related products such as hotels, flights, and car hire.
Williams got the idea for Skyscanner after becoming frustrated while searching for cheap flights to ski resorts. To solve this problem, the trio created a spreadsheet which then turned into a search engine comparing the cost of flights across various airlines.
Over the next decade, the company experienced rapid growth and became one of the go-to online travel sites. In 2011, Skyscanner acquired similar platform Zoombu in the European market.
The company then expanded into China by partnering with Baidu, China’s largest search engine. Two years later, a new office was opened in Miami, Florida.
Skyscanner surpassed 100 million monthly active users in late 2019, with the company noting it had put more than 172 million flight passengers in the air during the preceding twelve months.
Skyscanner revenue generation
The Skyscanner platform is available online and through an app, with both free to use for consumers searching for travel deals.
So how does the company make money? Let’s take a look below.
Commissions
As an aggregator of travel services, the most significant source of revenue is the commissions earned from airlines, hotels, and car hire businesses.
The commission earned may result from cost-per-click (CPC) advertising or cost-per-acquisition (CPA) agreements.
Travel organizations compensate Skyscanner every time a consumer clicks on a search result (CPC) or purchases something through the Skyscanner platform (CPA).
Importantly, Skyscanner has entered into various arrangements with leading airlines to allow travelers to purchase airline tickets directly on its platform.
For consumers, this eliminates the need to visit individual airline websites or travel agencies.
Sponsored placements
Sponsored placements are simply advertising spots offered for sale on the Skyscanner website.
They may take the form of sponsored search results or banner ads, with the former likely based on a CPC model and the latter requiring advertisers to pay per impression.
Travel API
Third parties can access Skyscanner’s Travel API to display car, flight, and hotel data on their own platforms. Importantly, the third party can also accept bookings.
The company does not charge for the privilege of using its API. However, it can be assumed Skyscanner collects the same CPC and CPA revenue mentioned above from its vast network of partners.
Insurance
Launched in late 2020, Skyscanner insurance is a relatively new form of revenue generation.
Here, the company has partnered with XCover to offer travel insurance to consumers who can receive an instant quote by providing details of their trip.
For every new policy, XCover compensates Skyscanner with a referral fee.
Skyscanner Marketing Channels:
Search Engine Optimization (SEO): Skyscanner invests in optimizing its website and content to rank highly in search engine results for travel-related queries. This helps attract organic traffic from users searching for flights, hotels, and car rentals.
Search Engine Marketing (SEM): Skyscanner utilizes paid advertising campaigns on search engines like Google to target users actively searching for travel-related information. This includes pay-per-click (PPC) ads that appear at the top of search results pages.
Social Media Marketing: Skyscanner maintains a presence on various social media platforms such as Facebook, Instagram, and Twitter. It uses these channels to engage with users, share travel tips and deals, and promote its services.
Email Marketing: Skyscanner may send personalized email newsletters and promotional offers to its subscribers, highlighting flight deals, hotel discounts, and other travel-related information.
Content Marketing: Skyscanner produces and shares informative and engaging content on its website and blog, covering topics such as travel tips, destination guides, and industry news. This content helps attract and retain users while positioning Skyscanner as a trusted authority in the travel space.
Skyscanner Distribution:
Website and Mobile App: Skyscanner operates a user-friendly website and mobile app where users can search for and compare flights, hotels, and car rentals. This serves as the primary distributionchannel for Skyscanner’s services.
Partnerships: Skyscanner partners with various travel providers, including airlines, online travel agencies, and hotel chains, to offer their inventory to Skyscanner users. These partnerships expand Skyscanner’s offerings and provide users with a wide selection of travel options.
Affiliate Network: Skyscanner may leverage affiliate partnerships with other websites and travel-related platforms to distribute its services. This allows Skyscanner to reach users who may not directly visit its website or app but access travel information through affiliate channels.
API Integration: Skyscanner provides Application Programming Interface (API) integration options for partners who wish to integrate Skyscanner’s flight search functionality into their own platforms, such as travel agencies and online booking sites.
White Label Solutions: Skyscanner offers white-label solutions to partners who want to integrate Skyscanner’s search technology into their websites or applications under their own branding. This allows partners to offer flight search capabilities to their users without developing their own technology.
Key Highlights
Founding and Purpose:
Founded in 2003 by Barry Smith, Bonamy Grimes, and Gareth Williams.
Originated from Williams’ challenge in finding affordable flights to ski resorts.
Revenue Streams:
Commissions: Primary revenue source from airlines, hotels, and car hire partners.
Earned through cost-per-click (CPC) and cost-per-acquisition (CPA) arrangements.
Commissions from flight bookings directly on Skyscanner’s platform.
Sponsored Placements: Selling advertising spots on the website.
Includes sponsored search results and banner ads.
Travel API: Offers its API to third parties for displaying and booking travel data.
Access to Skyscanner’s API likely involves CPC and CPA revenue.
Insurance: Introduced Skyscanner insurance in late 2020.
Partnership with XCover for travel insurance.
Skyscanner receives referral fees for each new policy.
Business Growth:
Expanded from a spreadsheet idea to a metasearch engine in over 30 languages.
Achieved rapid growth and became a leading online travel site.
Acquired Zoombu in 2011 for European market penetration.
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Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
