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Why Skyscanner's Business Model is so successful?

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Skyscanner’s Company Overview


Skyscanner is a leading global travel search platform that offers a comprehensive range of options to its users, including flights, hotels and car hire services. The company, headquartered in Edinburgh, Scotland, uses advanced technology to compare millions of travel options from hundreds of trusted partners in real-time, providing users with the most cost-effective and convenient travel arrangements. Skyscanner leverages its strong customer focus, vast experience, and commitment to innovation to maintain its position as one of the most preferred travel search engines globally.

Skyscanner's business model revolves around acting as an intermediary between travelers and travel service providers. The company offers a free-to-use platform where users can search, compare and book the best deals for their travel. Skyscanner does not sell tickets or bookings directly. Instead, it directs the users to the airline, hotel, or car hire provider’s website where the transaction is completed.

As for its revenue model, Skyscanner generates income primarily through advertising and referral commissions from travel service providers. When a traveler uses Skyscanner and clicks through to a provider's website and makes a booking, Skyscanner receives a commission. It also earns from cost-per-click (CPC) agreements with advertisers, and in some cases, Skyscanner has a revenue-sharing model with its partners. This model has allowed Skyscanner to achieve a sustainable flow of revenue while providing a valuable service to both travelers and service providers.

https://www.skyscanner.net/

Headquater: Edinburgh, Scotland, UK

Foundations date: 2001

Company Type: Subsidiary

Sector: Consumer Services

Category: Travel

Digital Maturity: Digirati


Skyscanner’s Related Competitors



Skyscanner’s Business Model Canvas


Skyscanner’s Key Partners
  • Investors (Artemis s.a, SEP, Scottish Equity Partners, Sequoia Capital, Yahoo!)
  • Distantias Sites (Distantias.com, Earthdistances.com, Hotel-deals.co.uk, Mapsof.net, Ukdistances.com)
  • Affiliate program (Skyscanner’s white label service has been adopted by many other major airlines, Search API, TravelPro API, Travel Insight API)
  • Travolution Awards
  • TravelMole's prestigious Web Awards
  • 2011 Red Herring Top 100 Europe Award
  • Trusted merchants
  • The Vayama Travel Group; Industry partners (Airlines, Corporates, Hospitality, Media, Mobile, Online travel agents, Technology, Tourist boards)
Skyscanner’s Key Activities
  • Marketing
  • Distribution
  • Payment processing
  • Platform operation
  • Platform upgrade and expansion
  • Legal and Intellectual Property
Skyscanner’s Key Resources
  • Aggregation engine
  • Travel-Search technology as its software
  • Core search technology- it combines deals from other sites to make a comparison
  • The technology system that powers the engine
  • The prestigious Skyscanner Business Partners Program
  • Research & Development team
  • IT infrastructure
  • Skyscanner for Business (a suite of products that enables travel brands to optimize performance and revenue)
  • It’s a disruptive innovator in the travel sector
  • 60 million users per month
  • 600+ million downloads
  • Access to 1200 global partners
  • Information about all airlines and their system upgrades and related airlines
  • Operations team
  • Security
  • Scale and performance
  • Brand awareness
Skyscanner’s Value Propositions
  • To provide the information you need to be able to quickly find the cheapest flights and that can help you make decisions with regards to purchasing a flight ticket
  • To be the most trusted and most powerful global travel content provider in the world
  • To enable you to find the best travel options across hundreds of global providers
  • To combine over 1200 Car rental companies worldwide in one simple search to find you the best deal
  • To help you find the best deals on hotels
Skyscanner’s Customer Relationships
  • Online travel agency
  • Booking system
  • Consumer travel trend data
  • Planning
  • Searching
  • Booking
  • Recommendations
  • Convenience
  • Nurture
  • Personalization
  • Self-service
  • DIY
  • Community
  • Word-of-mouth
  • Grades & points
  • Messaging
  • Trust
  • Transparency
  • Integrity
  • User experience
  • Etiquette
Skyscanner’s Customer Segments
  • Travelers of all types (business, personal, etc.)
Skyscanner’s Channels
  • Website
  • API
  • Widgets
  • App Center
  • Ads
  • Main social networks
  • Blog
  • Newsletter
  • Traveler Footprints (access to data on millions of monthly users from around the world)
  • Network of over 1000 travel companies and airlines (easyJet, et cetera)
Skyscanner’s Cost Structure
  • Network infrastructure
  • Software
  • IT operations and maintenance
  • IT hosting
  • Salaries
  • Support and customer service
  • Marketing
  • Offices
Skyscanner’s Revenue Streams
  • Ads (Bing, Booking.com, GetYourGuide, +50)
  • Direct bookings fees
  • White labels
  • Personalized toolbars

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Skyscanner’s Revenue Model


Skyscanner makes money by combining different business models. Below, you will find the list of the different monetization strategies identified for this company:

  • Brokerage
  • Two-sided market
  • Lead web
  • Advertising
  • Bundling
  • Referral
  • Dynamic pricing
  • Cash machine
  • Channel aggregation
  • Remainder retail
  • eCommerce
  • Experience selling
  • Acquiring non customers
  • Decomposition
  • Combining data within and across industries
  • Cross-selling
  • Reseller
  • Customer relationship
  • Channel per purpose
  • Digital
  • Disintermediation
  • Exposure
  • Low cost
  • Long tail
  • On-demand economy
  • Online marketplace
  • Open business
  • Revenue sharing
  • Self-service
  • Tag management
  • Customer loyalty
  • Customer data
  • Discount club
  • Reverse auction
  • Technology trends
  • Mobile first behavior
  • Brands consortium
  • White label
Analytics


Market Overview
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  • Sectors
  • Categories
  • Companies
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Skyscanner’s Case Study


Skyscanner's CASE STUDY

As we delve into the case study of Skyscanner, a company positioned as a leading force in the global travel search industry, it is essential to understand what makes this organization special and unique. From its humble beginnings in 2001 to its current standing, Skyscanner has evolved into a digital powerhouse, offering users an intuitive platform to compare flights, hotels, and car hire services.

Beginnings in Edinburgh

Skyscanner was founded in 2001 in Edinburgh, Scotland, by three IT professionals: Gareth Williams, Barry Smith, and Bonamy Grimes. Their objective was to create an easy-to-use tool to compare and find the best flights available. They saw a gap in the market for a comprehensive and user-friendly travel search engine. With relentless dedication, they developed Skyscanner into a dominant player, leveraging cutting-edge technology that efficiently processes and compares millions of travel options.

Customer-Centric Innovation

At its core, Skyscanner thrives on its customer-centric approach. Our platform is designed to save travelers time, simplify travel arrangements, and help them make informed decisions. One of our essential innovations includes a sophisticated aggregation engine, which instills Skyscanner's competitive edge. This technology harmonizes data from over 1200 global travel partners, ensuring that our 60 million monthly users receive the best deals available. Skyscanner's value proposition is further strengthened by its intuitive design and user experience. Our research and development (R&D) team have consistently pushed the envelope to enhance the platform's efficiency, accuracy, and speed. One notable aspect is our investment in mobile technology. Skyscanner's app, with over 600 million downloads to date, allows users to search and book travel arrangements instantly, reflecting our "mobile first" behavior strategy.

The Business Model

The beauty of Skyscanner's business model lies in its simplicity and effectiveness. Unlike traditional travel agencies, Skyscanner acts as an intermediary, offering a free-to-use platform where users can search, compare, and book the best deals directly through different providers. Our revenue is primarily driven by advertising, referral commissions, and cost-per-click (CPC) agreements with partners. For example, when a user clicks through to make a booking on an airline’s website, Skyscanner receives a commission from the travel provider. Additionally, some partnerships operate on a revenue-sharing model, providing us with a steady stream of income while delivering immense value to our users.

Global Recognition and Reliable Partnerships

Skyscanner's reputation as a trusted and reliable travel search engine has garnered several accolades, including the Travolution Awards and the TravelMole's prestigious Web Awards. We attribute our success not only to the technology and business strategy but also to the robust network of key partners that we’ve cultivated over the years. These partners include renowned investors such as Sequoia Capital and Scottish Equity Partners and industry giants like Yahoo!. In the travel sector, trustworthy data is paramount. Skyscanner collaborates with hundreds of airlines, hotels, and car hire providers to ensure accurate and comprehensive results. This network equips us with real-time data and enables dynamic pricing strategies that benefit our users, making travel more accessible and affordable.

Customer Relationships and Channels

Building and nurturing relationships with our users is at the heart of Skyscanner's strategy. Our focus on convenience, transparency, and integrity has fostered a loyal customer base, evidenced by the millions of users who rely on our platform daily. We maintain engagement through various channels, including our website, app, blogs, newsletters, and a strong presence on social media. Furthermore, we provide bespoke APIs and widgets that integrate with other digital platforms, amplifying Skyscanner's reach and usability. By leveraging data on traveler behavior and trends, we offer personalized recommendations and insights that enhance the overall user experience.

Maintaining a Competitive Edge

In the highly competitive travel industry, continuous improvement and adaptation are crucial. Skyscanner's commitment to innovation and digital transformation keeps us at the forefront. We have embraced the "digirati" philosophy, investing heavily in digital marketing, data analytics, and artificial intelligence (AI) to refine our services continuously. For instance, our AI algorithms anticipate user preferences and present relevant travel options, while machine learning (ML) optimizes search results and improves the platform’s performance. This dedication to leveraging technology enables Skyscanner to scale efficiently and remain resilient in an ever-evolving market landscape.

Impact of the COVID-19 Pandemic

The COVID-19 pandemic posed unprecedented challenges to the travel industry. Skyscanner experienced significant disruptions but responded proactively by introducing flexible booking options, providing timely updates on travel restrictions, and supporting users in rescheduling their plans. As a result, user trust in Skyscanner strengthened, demonstrating our ability to adapt and maintain service quality in times of crisis.

Future Directions

As we look forward, Skyscanner aims to further solidify its position as a global travel search leader. Our future initiatives include expanding partnerships with emerging travel service providers, enhancing personalization features, and exploring new revenue streams. Additionally, we are committed to sustainable travel practices, contributing to the broader goal of reducing the travel industry's carbon footprint. In conclusion, Skyscanner's case study is a testament to how combining innovative technology, strategic partnerships, and a keen focus on customer needs can create an enduring and successful business model. By continually evolving, Skyscanner remains a beacon of excellence in the global travel industry, offering unmatched value to millions of travelers worldwide.


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