COMPETITIVE RESEARCH IT Spending and Key Technology Initiatives – TRAVEL and TOURISM INDUSTRY CONTENTS: Background Information Research Methodology Industry Overview Findings Competitor Analysis Booking.com (Priceline) Expedia Thomas Cook TripAdvisor Suggestion and Recommendations to TUI AG

1. Sanjay Talukdar
COMPETITIVE RESEARCH
IT Spending and Key Technology Initiatives – TRAVEL INDUSTRY
Prepared by -

2. TABLE OF CONTENTS
• Background Information
• Research Methodology
• Industry Overview
• Findings
• Competitor Analysis
– Booking.com (Priceline)
– Expedia
– Thomas Cook
– TripAdvisor
• Suggestion and Recommendations to TUI AG

3. BACKGROUND INFORMATION
3
CLIENT: TUI AG
Travel and Hospitality
Industry
Competitors
Booking.com; Expedia;
Thomas Cook and
TripAdvisor
Research Focus
Analysis of IT spending
of competitors
Business impact of the
technology initiatives on
the companies
Type of Research
Competitive Research
Best practices to be
adopted by TUI AG
Recommendations to
TUI AG

4. RESEARCH METHODOLOGY
4
• Competitive
Research
• Desk Research
Research Type
• Co annual reports
• Press Release
• Previous research
reports
Secondary
Research
• IT spending of
each company
• Case Study -
Tech initiatives
Competitor
Analysis

5. • Deeper penetration of Internet across the world
• Youths form large chunk of population – Tech Savvy
• Consumer wants information before purchase
Online Travel Industry:
• In 2012; 1 bn International arrivals
• 70% travelers update status of Facebook
while on vacation
INDUSTRY OVERVIEW
5
7
7.29
6.85
6.9
6.95
7
7.05
7.1
7.15
7.2
7.25
7.3
7.35
2013 2014
USDTrillion
* Expected
• In 2013, travel and tourism contributed $ 7 trillion to
the global economy
• Revenues will grow by 4.2% in this year
Global Travel and Tourism Industry Growth Drivers
Mobile/Tablet apps:
• 85% leisure travelers use Smartphone
• 30% use mobile apps to find hotel deals
• Industry players investments have paid –off
Consumer centric:
• 62% user research about upcoming trip
• Activities; Read/Give Reviews, watch video
Social Media: Big Data way to go
• 50% bookings via social media
• Volume, Variety, Velocity and Veracity
* source

6. FINDINGS
IT SPENDING:
Company
Total
Revenue
IT
Spending
IT/
Revenue
Priceline
Booking.com
5260 43 0.81%
Expedia Inc 4030 485 12.0%
Thomas
Cook
15755 209 1.30%
TripAdvisor 762 87 11.40%
Total 25807 824 3.19 %
Key Technology Trends:
• Automate inventory management
• Customized service
Priceline acquires Kayak for $1.8bn in 2012
• Social technologies
39% travel agents employ
social media; 49% use Facebook; 44% LinkedIn
• Seamless experience - all touch points
6
(Figures in $mn)
• No industry level benchmark set in terms of %
technology spend among companies
• Some companies spending about 11-12% of their
revenues on technology
• Other major players limiting it to close to 1% of
their revenue
Year 2012* Source: Company Annual reports

7. COMPETITOR ANALYSIS – BOOKING.COM
(PRICELINE)
Total Transaction Value 2011 2012 2013
Mobile Booking
Transactions
1 3 8
7
Description 2012 2011
Total Revenue 5260 4355
Information Tech
Spending
43 33
% of Total
Revenue
0.81% 0.75%
(Figures in $mn)
(Figures in $mn)
• Tech Initiatives and Impact:
Mobile app
• + 20 mn download ; +1mn Recommended on
Google
Business Impact
• Total transaction value (TVA) via app : $8 bn in 2013
Acquisition
• $ 3mn deal : Priceline acquires Qlika
• Manage & optimize millions of micro-campaigns
using BIG Data analysis – Qtree (micro market
strategy)
Increase of $ 10mn investment in IT spending
in 2012 as compared to 2011
TVA via app doubled from over $3 bn in 2012
to $8 bn in 2013
* Source: Company Annual report

8. COMPETITOR ANALYSIS – EXPEDIA
8
(Figures in $mn)
• Tech Initiatives and Impact:
Looking into the future
• Technology investments; $ 381mn in 2011 and $ 485mn
in 2012
• Revenues has consistently been making increased
expenses tied to technology investments and
international expansion
Investment in start-up
• Room 77 : American co - search for hotels across
multiple travel sites at the same time (meta search
feature)
• Invests $ 30mn in start up
• Promises of $ 72 in savings per stay
• Repeat booking rate of more than 50 %
Increase of $ 104 mn investment in IT
spending in 2012 as compared to 2011
Break-up of IT spending
Description 2012 2011
Total Revenue 4030 3449
Technology and
content spending
485 381
% of Total Revenue 12.0 % 11.0 %
Description 2012 2011 Change
Personnel and
Overhead
219 183 31%
Depreciation/amortiz
ation tech assets
116 84 38%
Others 106 97 10%
Total 485 381 27%
(Figures in $mn)
* Source: Company Annual report

9. COMPETITOR ANALYSIS – THOMAS COOK
9
(Figures in $mn) • Tech Initiatives and Impact:
Description 2012 2011
Total Revenue 15755 3481
Technology and
content spending
209 206
% of Total Revenue 1.3 % 5.9 %
Cutting costs by IT enabled improvements
• $ 209mn and $ 206mn - In 2012 & 2011 respectively
• $ 71mn - cost savings achieved in 2011-12 period
Earning Profit and looking for more
• Company reported operating profit for the first time
in three years – in 2013
• Thomas Cook India Launches interactive and
innovative tablet app* Source: Company Annual reports
Company
Total
Revenue
IT
Spending
IT/
Revenue
Priceline
Booking.com
4355 33 0.76%
Expedia Inc 3449 381 11.0%
Thomas
Cook
3481 206 5.92%
TripAdvisor 637 57 8.95%
Total 11922 677 5.68%
(Figures in $mn)
Year 2011
$ 71mn saving achieved during 2011-12
5.68% as compared to 3.19% in 2012

10. COMPETITOR ANALYSIS – TRIPADVISOR
10
(Figures in $mn)
• Tech Initiatives and Impact:
Meta display feature & Social Media
• 15% of TripAdvisor’s total traffic is using the meta-
display
• 35% of TripAdvisor’s new reviews are derived from
its Facebook connected members
Increasing Revenue
• 20% increase in its 2012 revenues, technology and
content spending was more than $ 30mn as
compared to 2011 i.e., $ 57mn
Increase of $ 30mn investment in IT spending
in 2012 as compared to 2011
Break-up of IT spending
Description 2012 2011
Total Revenue 762 637
Technology and
content spending
87 57
% of Total Revenue 11.4 % 8.9 %
Description 2012 2011 Change
Personnel and
Overhead
80 51 56 %
Others 7 6 7 %
Total 87 57
(Figures in $mn)
* Source: Company Annual report

11. SUGGESSTIONS & RECOMMENDATIONS – TUI AG
Industry
Standard
• TUI AG may look to invest separately in IT initiatives as per the benchmark set by other competitors;
average technology spending, spend as a percent of revenue of 4 competitors is 3.19% in 2012
• TUI AG should look forward to allocate definite spending for Technology and Mobile spending
Consumer
Centric
• Mobile app, Tablet app and Website integration over different screen size providing customer rich
user experience
• The company should explore opportunities in metasearch as these days, the customers like to
compare from various websites before finally settling on a service provider
Big Data
Analytics
• The company should make investments in analytics for better competitive advantage via analyzing
the consumer data at all touch points and via IP based delivery model
• Micro segmentation strategy: Company could focus on targeted groups with the help of specific
software/platform
11

12. THANK YOU!
12