Expedia: We’re not the bad guys

Hotel chains have been talking about moving guest bookings away from Expedia using rate parity and loyalty programs.

By Colleen Isherwood, Editor

LAS VEGAS—Mobile is king—especially when it comes to last minute bookings. The company is looking at payment models that will no longer require guests to pay when they book. Expedia has identified its target customers, and insists that they are quite different from the ones the brands are trying to attract. And, most importantly, rapid change is the name of the game, according to speakers at Expedia’s Partner Conference, held in Las Vegas last month.

Mobile growing the fastest

Expedia president and CEO Dara Khosrowshahi told the audience that the company is now moving from older technology to a time of rapid innovation in which platforms are changing and expanding.

“Now people can get that great [online] experience not only on their PC, but also on their iPad, Nook or Kindle. And there are 50 to 70 different versions of hotels.com every single day.”

But mobile is by far the fastest growing platform.

Two statistics stand out. Khosrowshahi noted that 70 per cent of mobile stays were booked within 24 hours of travel—making them fundamentally different from stays booked by desktop travellers.

Noting that both last minute and 90-day-plus bookings have increased dramatically, Laurens Leurink, president, Lodging Partner Services, said that 81 per cent of those who booked on their mobile at the last minute, booked from within 10 miles of the hotel.

The Expedia customer

“We’re not the bad guys,” David Roche, president, Global Lodging Group, told CLN in an interview at the end of the conference. “Our position is dead centre between the customer and our hotel partners.”

He also pointed out that the core online travel agency (OTA) customer is not necessarily the same person the hotels are trying to lure with promises of rate parity and loyalty programs.

“Economically it makes sense to chase the genuine transient,” he said. The core OTA customer is one who doesn’t know brands and doesn’t know the city.

People who are familiar with a hotel chain and a destination will use a booking path that leads straight to the brands’ sites. If they use Expedia, they do it to compare rates and then they book on the brand site and get their loyalty points. “If you’re a chain loyalist, I’d like to filter you out. You’re ruining me financially,” he noted.

Payment options changing

Expedia found that it was experiencing a lot of conversion loss in the checkout phase, since customers are used to sites like Amazon, eBay and PayPal where they have the option to pay later. It is now introducing the Expedia Travel Preference Program. Customers can still pay at the time of booking, but there will be the option of paying at the hotel.

International travellers

For the first time during the first quarter of 2012, more than 50 per cent of Expedia’s 9 billion travellers came from outside the U.S.—a sea change in the ratio of domestic to global travellers, Khosrowshahi told the group.

Expedia Inc. is well-equipped to deal with these global travellers, especially since it has eLong, the second largest booking engine in China, as part of its portfolio.

International travellers are a high growth area, Leurink said. They spent $25 billion in 2012, an amount expected to grow to $164 billion in 2016. eLong bookings are expected to increase by 941 per cent during that period.

Expedia Inc.
o   Expedia states that it is the world’s leading online travel company, whose mission is to revolutionize travel through the power of technology

o   A global company, it operates more than 140 leisure and corporate travel sites in nearly 70 countries across nearly a dozen notable travel brands—reaching 55+ million consumers each month.

o   It is a partner to more than 160,000 hotels and hundreds of airlines, rental car, cruise, rail and tour operators and in-destination activity providers.

o   It is an innovator in new channels.  Collectively, Expedia, Inc. offers 130+ mobile web sites, and its mobile apps have been downloaded more than 15 million times in 200+ countries at a rate of 35 downloads per minute.

The Expedia Family

o   Expedia Lodging Partner Services is the central point of contact for hotels to access the global Expedia marketplace. It is a team of more than 500 travel industry experts and revenue management specialists located in cities around the world.

o   Expedia.com is a leading online travel site, helping millions of travellers per month plan and book travel. Established in 1996, it has 30 sites in 30 countries.

o   Hotels.com offers a wide selection of more than 160,000 properties and an award-winning customer loyalty program, Welcome Rewards. Established in 1991, it has 75+ ties in 60+ countries, and deals with hotels only.

o   Hotwire is a leading discount travel site. When travel providers have unsold rooms, cars and airline seats, they use Hotwire to fill them. Established in 2000, it has nine sites in eight countries. Primarily opaque, it deals with air, hotel, car rentals, cruise activities and attractions.

o   Egencia is a full-service travel management company with over 10,000 clients around the world. Founded in 2002 as Expedia Corporate Travel, it was renamed Egencia in 2008, and deals with air, hotel, cars, corporate travel, meetings and events.

o   eLong.com is the second largest provider of online travel booking services in China. Acquired in 2005, it has one site in China and deals with air, hotel, activities and attractions.

o   venere.com is a European online hotel reservations specialist featuring more than 120,000 hotels, beds and breakfasts and vacation rentals in 30,000 destinations worldwide. Acquired in 2008, it has seven sites in eight countries.

o   Expedia Affiliate Network creates private-label technology platforms and services that power some of the biggest brands in travel, by working with airlines, OTAs and search partners.

o   Expedia Media Solutions, the advertising sales division of Expedia Inc., is dedicated to building online and offline media partnerships for travel and non-travel brand advertisers.