Expedia: how technology will shape future travel

Eric Hart, CFO, Expedia Group.

SEATTLE, Wash. — Expedia Group shared its continued commitment to focus on technological innovation as a key driver in recovery and beyond at this year’s annual partner conference, explore’20, held virtually December 9-10.

Expedia is preparing for the surge in travel, making sure they are ready when that comes.

“I’m a total optimist regarding humanity’s need to travel,” said CEO and vice-president Peter Kern. “People want to be travelling, and we’re all miserable because we can’t.”

The bad news was that revenues were down 82 per cent in Q2 of 2020, but the great news is that we are on the other side of that, said Eric Hart, CFO, Expedia Group.

Cyril Ranque.

“There is pent-up demand for travel,” noted Cyril Ranque, Expedia Group president, Travel Partners Group. “When people have confidence; when things reopen, it will go fast.” A big step for people will be their first trip — the key is where to focus: car is probably a better bet than air; and VRBO is probably more likely than big city hotels.

“We’re not too focused on recovery [in any particular area] in the early months of 2021; we’re more focused on preparing to signal to partners when we are ready on a real-time basis, showing where the demand is coming from and adjusting [accordingly]. We want to equip the industry to be ready. My prediction is that in Q2, travellers will get much more confident.”

Ranque believes that business travel will come back faster than predicted, within two or three years. “Very few companies can operate in just their home market,” he said.

He noted that two thirds of travellers are planning the same number of trips as before the pandemic, and that 37 per cent plan to book in the next six months.

Travellers will continue to expect flexibility, cleanliness and communication.

Eric Hart.

Cleanliness and flexibility are two key expectations of today’s travellers, said Hart. “We see a 10 per cent share shift with properties that have updated their safety information, among hotel properties, vacation properties and airlines. If your site doesn’t have cleanliness, I highly recommend you put it on there, as well as flexible cancellation policies.”

Ariane Gorin, group president of Expedia Business Services, which includes Expedia Partner Central, told a media roundtable that the impact of the pandemic on the need for cleanliness, would be similar to the impact of 9/11 on the need for security.

Virtual travel will not replace physical travel — it will just stimulate the appetite for real travel.

Ariane Gorin.

Hart noted a spike in places that are naturally outdoors, saying one of the fastest growing destinations is Yellowstone National Park on VRBO — because people can naturally social distance there.

People are travelling virtually during the pandemic, but Ranque thinks that virtual travel can be an incentive for real travel — showing them relevant experiences in a way that is seamless and integrated.

“There’s a lot of virtual travel, but it’s not going to replace actual travel,” said Gorin. “It’s making it more exciting for travellers to see [the real thing] in person. It’s easier marketing to someone who has seen it virtually.”

The booking window is a mixed picture: while people are booking local and regional travel at the last minute, they are also booking cruises and international travel for 2021 and 2022.

Expedia CFO Hart calls it a “bifurcation of bookings,” noting that: “People are either booking very short term, or they’re dreaming and booking long-term. For last-minute bookings, make sure you’re on Expedia.” On the long-term side, almost 9,000 passengers booked a single cruise promotion, with travel scheduled for 2021 and 2022.

VRBO was a huge winner for Expedia during the pandemic.

Peter Kern.

“VRBO has been a great thing for us,” said Kern. “VRBO is for families and bigger groups travelling together, who want the whole home experience. I’ve vacationed that way for more than a decade with my family.”

“On our side, VRBO has done great,” said Ranque. It is simple in theory, but the experience of many years with Expedia shows it is a core business.”

When it comes to the booking experience, use AI wherever possible. That frees up agents to answer more difficult questions, adding value for the customer.

Ranque noted that Expedia is looking to level the playing field between larger corporations and smaller partners by giving them access to comprehensive information on demand to improve their competitiveness, and to make it simple.

On the service side, Expedia is using artificial intelligence (AI) to get people the service they need more quickly. “On the partner side, we’re building in automated features. If you’re looking up a virtual card number, you don’t need humans to do that. Our own internal teams use AI-driven algorithms on which are the best opportunities to share with our lodging partners.”

Expedia was built by acquiring various companies, and it’s time to rationalize, and pare back on the number of entities.

Kern talked about the importance of looking at things with fresh eyes when you have a crisis. “We are all in the business on hanging on to an idea — this is no time for maybes; we need to be sure and focus on what we’re strong at. Technology and [using data to understand the] marketplace are where we are strong — we have a platform to power suppliers and customers.

“COVID is a blessing if you want to be a change agent because it’s hard to do business as usual. [When things are normal,] it’s hard to stop and take stock of things — during COVID, the world stops for you.”

Before the pandemic, Expedia Group already wanted to look at simplicity. “Our company was based on acquisitions and lot of different entities. We now need to think about brands, technology — almost everything. We have to be bold and fearless and acknowledge when it doesn’t work.”

Asked about three things Expedia does well, Kern said, “We understand customers; we drive success with our partners; and we have the best travel platform in the world.” If he had one word to describe 2021, it would be “rebirth”.