The dream of a travel one-stop-shop: what comes next?

For several decades, travel executives have been chasing the idea of building a one-stop shop where customers book flights, hotels, transfers and even entertainment in one place. While this sure sounds like the ultimate convenience, in reality, does it work or is it merely a logistical nightmare?  
 
Global online travel agencies like Booking.com and Expedia have been working to evolve from just accommodation-focused platforms to offer comprehensive travel services to position themselves as one-stop shops. However, to this day, particularly in the United States and western Europe, we do not have one dominating truly end-to-end travel platform for travelers. Why?

Fundamentally different businesses 

The concept of the all-in-one platform is, of course, alluring. The idea has been simple: to be able to book anything the modern traveler might theoretically need in a matter of minutes in one window.  

However, there are three undeniable drawbacks of an all-in-one travel platform: 

• Complex integration: managing fundamentally different travel services in one platform leads to challenges, integration issues and increased complexity.
• High amount of investment needed: building and maintaining an all-in-one platform requires skyrocketing investment.
• Pricing matters: the customers will mostly sacrifice convenience for a relatively minor price difference.  

For example, Booking.com offers a choice of more than 29 million property listings, including accommodations, flights, car rentals and activities, but for some reason, less than 10% of its transactions are "connected" trips. Despite years of investment, this segment remains small compared to their hotel division, with its growth having declined over time.

In my vision, the core issue is that travel sectors – flights, hotels and activities – are fundamentally different businesses that require specialized expertise. Each of these segments has its own operational and financial model, networks and customer journey that don’t easily blend with the others.

Trying to do all of them in one place often leads to mediocre user experience since there are companies that already dominate each niche with their brands, finely tuned systems, and optimized services and prices. Consumers prefer to book with trustworthy providers in separate categories instead of settling for a platform that tries to be everything but masters little. 

The complexity of building and maintaining such a platform also demands extensive resources. Running end-to-end travel business units across verticals requires an army of experts with skills in each area, as well as a tech infrastructure capable of bringing it all together.

Even if a company manages to get everything in place, the initial investment is staggering. Even if today's best-known names in the industry, who manage huge resources in human and financial capital, were able to build the processes and operations, they have struggled to make the additional travel services as profitable and successful as their core business.

And, they still offer them as upsells to customers who came to buy the core product. That is, in fact, the ultimate goal for the big holdings, including Booking.com, Trip.com, Expedia, etc., while most mid-size and small companies also aspire to implement this strategy at some point.

Companies that have pursued this model face another issue: travelers want the best prices and experience across all parts of their journey. Even to this day, customers prefer searching for flights and accommodations separately to find the best quality-price ratio and tend to be skeptical of the offerings of one-stop-shop platforms without a comprehensive benchmark.

The idea that travelers will opt for convenience over savings is overestimated; price comparison is ingrained in modern travel behavior. If a customer can find a better deal for a hotel on one site and a cheaper flight on another, he will happily use both, no matter how convenient a one-stop-shop platform may claim to be. 

The solution lies in specialization, not generalization 

Rather than chasing an impossible vision, small to mid-size travel companies should focus on what they do best: specialization. The most successful travel brands focus on a single vertical – they know it inside and out.

What should companies do? First, look for natural synergies between their core strengths and customer needs, focusing on strategic partnerships where they can add value. A company that excels in flight bookings can expand into adjacent services, such as travel insurance or ancillary products like baggage protection and seat selection. These services are aligned with the core business and don’t stretch the company’s resources thin trying to compete in a field they aren’t suited for.

Second, instead of cramming every service into one platform, companies should focus on interoperability. Partnerships with hotels or car rentals make more sense than trying to own everything and do everything on their own. The goal should be an ecosystem of specialized services. 

There is also the matter of cost-effectiveness, because by focusing on what works and partnering for the rest, companies can reduce costs while still offering a comprehensive travel experience to their customers. Basically, it’s not the consolidation that matters, it is the integration. 

A business can perfect one vertical and then expand by adding related services or partnering with other platforms. This creates a scalable model that doesn’t require the massive infrastructure of a one-stop shop. 

In summary, the truly one-stop-shop model in travel has not been realized due to its complexity, resource intensity, and failure to meet customer preferences. Only a few companies are in a position to even try.

Could Google do it? Sure. Could Booking.com pull it off? Probably. But here’s the catch: all that brand trust and pure convenience doesn’t mean much when a traveler can save $100 on their family vacation elsewhere. Even with the time and money to build these platforms, the giants might find themselves on shaky ground.

Travelers are already comparing a dozen websites to find the cheapest option. So even if one of these companies succeeds in creating the ultimate one-stop-shop, will it really be as profitable as their core business? Or worse, will it start to cannibalize their base profits? That’s the multi-billion-dollar question no one seems ready to answer. Yet.