7 ms·

When I first read this I thought, why would they start with hotels? may be because the big profit they make out of reservations? Then I remembered what an acco

by avd74 12y ago

When I first read this I thought, why would they start with hotels? may be because the big profit they make out of reservations? Then I remembered what an accountant friend once said to me: "Hotels are big portals between the black and white worlds". So you may have black money in bitcoins (and a Hotel which is your "legal business"), and want to "wash" it? now you can do it through Expedia (they having a bite in the process, hence their motivation).

malandrew 12y ago
Makes sense, but I'd love to here more on this. What features of hotels makes them particularly good portals between the black and white worlds.
- volker48 12y ago
  Hard to prove how many people actually stayed in the hotel would be my guess. Other businesses like restaurants have inventory so you can't as easily make it look like you made a great deal more money than you actually did.
  - seizethecheese 12y ago
    This idea is really seductive. Wouldn't it be kind of hard/traceable to fake bookings though? It seems like strip clubs or some sort of service company would be better.
- netcan 12y ago
  Say you run a hotel at 60% occupancy. Then the hotel suddenly goes to 80% occupancy. No additional costs. No inventory paper trail. A small motel with paper bookings could probably launder a lot of money for a silent partner. 10k comes in as bitcoin bookings (2-3 rooms per night). 10k-laundry fee gets paid as dividends to an "investor," "consultant" or anything really. The reservation books are paper. Many consumer facing service businesses fit the bill, but hotels are a nice big category. It makes sense for them to be accepting internet payments.
gedrap 12y ago
>> "Hotels are big portals between the black and white worlds". When I read that, I thought of people making trips that they would prefer no one finding out about. Affairs, etc. I guess that's also a legitimate use case for adopting BTC.
onwardly 12y ago
As an entrepreneur in the travel space, my guess is that this move is primarily a PR move, and actual Bitcoin transactions aren't expected to move the needle in any substantial way. If its primarily a PR move, the reason for starting with hotels is simple: Expedia, and all the OTAs (Online Travel Agency), make the VAST majority of their profit from hotel bookings* due to two factors: 1) Airlines pay extremely small commissions (starting with when Delta announced 15 years ago they wouldn't pay commissions on flights) 2) Hotels pay extremely high commissions, since unsold hotel rooms disappear as inventory the next day Assuming the goal is PR, Expedia cares much more about getting consumers to think of Expedia as a place to book hotels than they do booking flights- thus they are "starting" with hotels. *For example, in 2013 Priceline sold 270M hotel nights and 7M airline tickets. Of their $7B in revenue and $2B in profit, very very little came from airline ticket sales.

by avd74 12y ago

malandrew 12y ago

Makes sense, but I'd love to here more on this. What features of hotels makes them particularly good portals between the black and white worlds.

volker48 12y ago
Hard to prove how many people actually stayed in the hotel would be my guess. Other businesses like restaurants have inventory so you can't as easily make it look like you made a great deal more money than you actually did.
- seizethecheese 12y ago
  This idea is really seductive. Wouldn't it be kind of hard/traceable to fake bookings though? It seems like strip clubs or some sort of service company would be better.
netcan 12y ago
Say you run a hotel at 60% occupancy. Then the hotel suddenly goes to 80% occupancy. No additional costs. No inventory paper trail. A small motel with paper bookings could probably launder a lot of money for a silent partner. 10k comes in as bitcoin bookings (2-3 rooms per night). 10k-laundry fee gets paid as dividends to an "investor," "consultant" or anything really. The reservation books are paper. Many consumer facing service businesses fit the bill, but hotels are a nice big category. It makes sense for them to be accepting internet payments.

gedrap 12y ago

>> "Hotels are big portals between the black and white worlds". When I read that, I thought of people making trips that they would prefer no one finding out about. Affairs, etc. I guess that's also a legitimate use case for adopting BTC.

onwardly 12y ago

As an entrepreneur in the travel space, my guess is that this move is primarily a PR move, and actual Bitcoin transactions aren't expected to move the needle in any substantial way. If its primarily a PR move, the reason for starting with hotels is simple: Expedia, and all the OTAs (Online Travel Agency), make the VAST majority of their profit from hotel bookings* due to two factors: 1) Airlines pay extremely small commissions (starting with when Delta announced 15 years ago they wouldn't pay commissions on flights) 2) Hotels pay extremely high commissions, since unsold hotel rooms disappear as inventory the next day Assuming the goal is PR, Expedia cares much more about getting consumers to think of Expedia as a place to book hotels than they do booking flights- thus they are "starting" with hotels. *For example, in 2013 Priceline sold 270M hotel nights and 7M airline tickets. Of their $7B in revenue and $2B in profit, very very little came from airline ticket sales.