What is the best online hotel booking app? This question always comes to mind when planning a personal or professional trip.

The first name always comes to mind is Airbnb, but- Do you know who its strongest competitor of it? The answer is Agoda, and I hope you already know about it, but if not, this blog will help you learn some helpful information. 

This blog is created to share some valuable information about the Agoda app business model, which is one of the premium brands of the hotel booking industry. Agoda’s business model is inspirational to follow if you want to work on similar concepts and launch your own online hotel booking app.

So, let’s start with some basic information; then, we will move forward to read about the business model of the Agoda app.   

 

What is Agoda?

 

 

The simple information about the Agoda platform is a metasearch engine that allows users to search for flight booking, accommodation, and car booking. It showcases the hotels and individual apartments with all facilities that anyone can rent to spend quality time.

The above definition depicts the working, but the official definition can be given as follows – Agoda is a Singapore-based online travel agency that offers multiple options for vacation rentals, flights, hotel booking, private stays, and more.

Agoda Company Pte. Ltd owns the platform, and it is headquartered in Singapore and a subsidiary of Booking Holdings. Its founders are Robert Rosenstein and Michael Kenny. 

The intention of Agoda is – Less Hassle, More Travel, and its mission is to provide affordable travel options to all. The management is committed to offering the seamless experience of traveling from end to end. The company’s tenure is of 16 years, and it is continuous on the path of growth. 

Here are other details that you would love to know:

• 25 Worldwide offices 
• 2.9 Million properties worldwide
• Presence in 200+ countries
• 38 languages supported platforms
• 5000+ employees around the globe

Most people also search over the internet – What exactly does Agoda offer?

The answer is already revealed earlier in this blog. The Agoda platform collaborated with hotels, private villas or property owners, airlines, travel services providers, vehicle rental services providers, and others. The users can choose from 2.9 million hotels and 1.5 million private homes, city apartments, family homes, and pool villas. 

Agoda is a legendary example of a travel startup that can take help from an experienced travel app development company with comprehensive experience in developing apps for the travel and hotel industry.

 

The Agoda’s Key Products 

Agoda offers a variety of products that users can leverage as per their travel needs. 

• Agoda Preferred: These properties have partnered with Agoda for a long time. 
• Agoda Special Offers: It is for special discount offers and deals where a user can view more details by clicking on the icon. 
• Agoda Cash is a reward program you can use for your next booking. Its validity is till 31st December.  

• Agoda VIP Program: It stands for customer loyalty and reward program. Users do not need to sign up. It starts with only two bookings in two years.  
• Mix and Save: Users can split their reservations and save money on bookings. It applies for 2 to 14 days of booking. 
• Monthly Stays: For a month-long stay, deals are always available. Users can acquire information from the platform. 
• Day Use: It applies to day rate deals in selected countries. 
• Bundle & Save: The bundle and save option allows you to book flights and hotels simultaneously.
• Travel Guides: It is free to use and provides information on tourist attractions, hotels, and activities. 
• GoLocal: The GoLocal showcases discounts on local properties, i.e., hotels and private homes.  
• Easy Cancel: A display badge shows the eligible properties allowing cancellation up to 24 hrs after check-in.  
• TTogether: It is a supporting campaign for the Thai Government’s initiatives for promoting local tourism. 
• Payment Options: customers can choose the payment model of their choice.

 

 

Agoda’s History

Agoda is one of the leading and fastest-growing travel booking platforms. From the historical perspective, the Agoda is the creation of two school friends, Michael Kenny and Robert Rosenstein. 

Do they have started with the Agoda platform initially? No, the interesting information is they started with PlanetHoliday.com and PrecisionReservation.com in 2005; they combined these two and launched the Agoda platform.

The next turning point came in 2007 when Booking Holdings(Booking.com) acquired it. In 2011, Agoda stepped onto mobile platforms in the form of the Agoda App for Android and iOS. 

The other points of Agoda’s history are: 

• 2014- Booking Holdings acquired Qlika(Israel based) and merged it into Agoda. 
• 2016- WooMoo Taipei-based startup merged into Agoda.
• 2017- Agoda collaborated with private properties that a traveler can rent for a day or days. 
• 2018- CEO & Cofounder Robert Rosenstein became Chairman, and former Coo stepped up as CEO of Agoda. 
• Its current CEO is Omri Morgenshtern. 

Related to the history of the Agoda platform, the next section of this blog is dedicated to some key stats of Agoda. It would be wonderful to look into the Agoda platform’s key stats if you are really interested to know about the Agoda app business model. So, let’s proceed. 

 

Agoda Key Stats & Facts 

 

•  Among overall travel portal users USA, brand awareness is 28% more than in previous years. 
• In the USA, 21% of overall travel lovers from the USA prefer Agoda platform. 
• It is a favorable choice for the 18-64 years age group. 
• The global online travel sector is projected to be $691 billion by 2026, which was $433 billion in 2021. 
• The annual revenue of the Agoda app is nearly around $760 million. 
• Booking holdings revenue for the quarter ending September 2022 was $6.052 billion, a 29.43% increase year-over-year. 
• The website registration date is 16th March 2004, website traffic is 20+ million/month, and the website worth is USD 1.5+ million.

 

Key Success Factors Behind Agoda’s Growth

Before understanding the key success factors behind Agoda’s growth, it would be best to know about the concept of online booking sites. These travel platforms or apps work like an eCommerce platform where you can choose what you need. Instead of goods here, you purchase holiday packages or pay for accommodation or rent a vehicle for the trip. 

Similar to the other industries, its prime objective is customer satisfaction, but what satisfies a user using a travel app like Agoda? In another language, this question can be like this –

• What are the key success factors behind Agoda’s growth? 

 So, here are these. 

 

#1. Business Model

Although you will find more information about the Agoda app business model in this blog, here I am sharing brief information with you. Agoda focuses on the merchant business model. It purchases the rooms and earns profit via sales. According to its model, Agoda encourages travelers to confirm bookings and ensure a confirmed revenue stream.

 

#2. Inventory

The Agoda app management is strong enough to manage the inventory. They have a good hold on the inventory mechanism, so during peak time, they easily provide or offer accommodation to travelers. 

 

#3. Horizontal Integration

The integration with car rentals, vehicle rentals, travel package providers, and other service providers. It expands its service range. On the other hand, customers get high-degree satisfaction when they find all options for travel at a single point. 

 

#4. Private Property on Rent

Renting a private property for vacations is trending now. It facilitates the traveler to have a private space while spending vacations at desired locations. The property owner earns from the rent, and Agoda earns from the commission, so all stakeholders remain satisfied. 

 

#5.  Involvement of Technology

Not only operational tactics, but Agoda is also strong at the involvement of technology in business. The Agoda app business model completely works on data analysis and actionable insights. They focus on derived data from local and international markets that enable them to apply a perfect strategy. 

 

#6. User-Friendly Website And App 

User-friendly websites and apps are one of the specialties of Agoda. The web and mobile application works seamlessly and creates the best user experience. Agoda mobile app and website are user friendly that engage the customers in the best way.  

Now, it’s time to move to the next section of this blog, which is based on the central theme of this blog – the Agoda app business model. 

 

The Agoda App Business Model 

How does Agoda make money? It is one of the questions that people ask and wants to know its answer to. This question is directly related to the Agoda app business model.

In simplistic terms, the Agoda app earns from commissions. When a traveler browses the accommodation, selects & compares the price, and books the hotel, then the property hosts a portion of the amount to the Agoda. 

The Agoda app business model is a merchant and agency-based model. It works as a mediator between host and guest. There are multiple options that a user can choose from, such as holiday packages, flight booking, and car rental. Usually, most users or travelers book packages.

So, it works like when a traveler books a package, they pay Agoda, and then Agoda pays (after deducting its commission) to the flight booking services. Hotel owner and vehicle owner when the actual trip happens. 

The major strength of Agoda’s business model is that they get cash upfront at the time of booking, and another strength is a collaboration with global & local hotel brands, private property owners, flight services, and vehicle rental services. 

 

From the Agoda app revenue model point of view, the mainstream revenue is generated via transaction fees by the customers. The platform is like a travel marketplace where customers can be buyers or sellers. Both of them, i.e., guests and hosts, need to register on the platform, and they get a notification of transaction completion. 

People also search about that –  How Much Commission Does Agoda Charge Its Partners?

The answer is Agoda charges 15-20% commission to its hosting partners. That means Agoda App earns 80-85% out of the total payment done by the customers and the rest of the amount they pay to the hosts. 

The revenue of the Agoda app is near around $1 billion, and in the future, it will be more. The whole credit goes to the Agoda app business model.

 

 

Top Competitors of Agoda

If you are looking to develop an app like Agoda by focusing on the Agoda app business model, then it is best to know about the top competitors of Agoda. It will help implement features and functionalities in your OTA(online traveling app). 

Let’s traverse the list fast!

 

SNO.	Brand Name	Headquarter	Founder(S)	Foundation Year
1	Booking.com	Amsterdam	Geert-Jan Bruinsma	1996
2	Expedia	Bellevue	Rich Barton  Richard Bangs	1996
3	Airbnb	San Francisco	Brian Chesky Joe Gebbia, Nathan Blecharczyk	2008
4	Google Travel	California	Google	2011
5	Vrbo	Aurora	David Clouse	1995
6	TripAdvisor	Massachusetts	Stephen Kaufer, Langley Steinert	2000
7	Hotels.com	Dallas	David Litman,  Robert Diener	1991
8	trivago	Düsseldorf, Germany	Malte Siewert,  Peter Vinnemeier, Rolf Schromgens	2005
9	OYO	Gurgaon	Ritesh Agarwal	2012
10	Hotels.com	Dallas	David Litman, Robert Diener	1991

 

How Much Does It Cost To Develop An Online Hotel Booking App?

One of the top searched questions by travel startup owners over the internet is the investment cost to develop an app like Airbnb or Agoda. It isn’t easy to estimate the cost of an app like Agoda as there are several influential factors.  

The factors are:

• Features 
• App Panels(admin, host, and users)
• UI/UX Development 
• Frontend Development
• Backend Development 
• No of developers were involved 
• Location of Developers 
• Tech Stack
• Platform(Android or iOS)

The top affecting factor is the cost to hire dedicated developers. It is always best to hire them as they have expertise in developing projects in different domains, including travel and hotel app development.

The approximate cost to develop an app like Agoda starts from $20,000. The app can be developed in different versions, such as basic, intermediate, and advanced. So, an estimated cost is like this:

• Cost of a Basic App Like Agoda: $20,000- $30,000
• Cost of Simple App Like Agoda: $30,000- $40,000
• Cost of Advanced App Like Agoda: $50,000+ 

The cost depends on the requirements. Suppose you need a fully functional app based on the Agoda app business model, then the cost will be more than $50k. 

 

The Final Thoughts 

The Agoda app business model is one of the best examples of online travel booking app models. It can be inspirational for travel-oriented startups to follow this model for growth and revenue generation.

Agoda’s business model focuses on a merchant-based model where it works as an intermediary between the customers and hosts, such as hotels, private villas, etc.

It takes money from the customers and pays the host after deducting the commission. The Agoda business model is simple but powerful and sets a milestone in the travel industry.