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Expedia Keeps Chugging Along

Online Giant CEO Khosrowshahi Details Company’s Growth Strategy

Tuesday, December 20, 2016
Miss Kerry Medina
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Despite the uncertainty of global political and economic climates, Expedia, Inc. continues to barrel into the future of travel and technology at the pace of a high-speed, maglev (magnetic levitation) locomotive.
Or at least that was the image that came to mind at this year’s Expedia Partner Conference at The Bellagio in Las Vegas where CEO Dara Khosrowshahi announced the company’s new rail offering.

A $130 billion business opportunity, the new train product—which is the result of a partnership with SilverRail—has already been launched in the U.K. on expedia.co.uk, but will now expand to the rest of Europe, the Americas and Asia. “We have an opportunity to upsell a service—hotel bookings, car rentals, etc.—and that’s what rail is about,” Khosrowshahi told 4,000 attendees in the general session. “It’s also a very high frequency purchase and those high-frequency touch points are gold for us as far as the services that we can market together to them.”

Already, hotel conversion across Expedia Inc.’s family of brands was up 60% year-over-year thanks to the company’s $1.3 billion acquisition of Orbitz late last year. “If conversion from Orbitz is up 60%, imagine what our technology can do for you,” Khosrowshahi told the audience, pointing out: “acquisition is absolutely part of our strategy.”

But in announcing plans to achieve $100 billion in gross bookings by 2020, Khosrowshahi also detailed a new strategy that will put greater focus on global expansion for the company, a move reflected in the new train product. “A little over one-third of our business is from outside the U.S. and we want to grow that to two-thirds,” he said. “Asia Pacific is paramount for us because it represents 60% of the global population and it’s growing.”

Currently, China is a strong partner for Expedia as far as local in-market partners who sell packaged inventory for outbound China travelers through Expedia’s suite of brands. But future investments in specific Asian markets include going full-service in Taiwan and Korea and redoubling investment efforts in India, where most of the travel spend is domestic. “With more than a billion consumers and smartphones, Indians will eventually look outwards and we want to make sure we’re there when they’re ready to travel and explore the world,” Khosrowshahi explained.

Doubling down on its mobile presence is critical to Expedia’s success in Asia where mobile usage exceeds that of the rest of the world. According to Khosrowshahi, more than 60% of the company’s current bookings from China are made via mobile and nearly 80% of time spent on the Internet in China and Hong Kong is on a mobile phone. “Mobile is now about bookings and we as a company are completely focused on it because that [trend] will only continue,” he said. “We need to continue building the best apps that are beautiful, fast, contextual and understand where the user is going. App users stay with us and repeat twice as much as the average consumer.”

With mobile enhancements in mind, Expedia plans to streamline the entire process for consumers, right up to actual on-site travel when consumers’ continue to rely on their mobile phones. Khosrowshahi cited the example of the impromptu car rentals that can sometimes occur when travelers deplane and realize they didn’t book this component of their trip, regretting the line at the car rental office counter that awaits once they clear baggage claim and/or customs and immigration. “The expectation of what’s good has changed and what was good 10 years ago isn’t good today,” he said. “We have to improve the booking process… all the way through to the in-market experience and that’s going to be an increasingly important area where we want to invest with you because travelers want the entire experience to be absolutely seamless.”

But improving Expedia’s mobile experience is not only a question of the products and services available to travelers through the platform, but also how consumers interact with it. After a decade-plus at the reins of Expedia, Khosrowshahi’s quest for next-generation technology remains tireless as he now looks to voice to succeed the current point-and-click method of booking travel online. He projects consumers will start talking more to their phones and household appliances as the advent of Artificial Intelligence and the Internet of Things will bring about natural language search. “Consumers want to be able to ask for anything,” he said. “In the past, we’ve trained consumers to ‘click here.’ With ‘ask,’ they can ask anything they want and we have to be able to answer that question, but it’s also another opportunity to attract more customers to our sites.”

Memory—and specifically Scratchpad RAM—is another focal point of investment for the company as it will allow customers to flip between a PC and a mobile platform during a booking while the site retains the customer’s specific search information regardless of the device used. So a consumer commuting home on a train, for example, can begin the trip search on their mobile phone and then continue where they left off on their PC at home. The Scratchpad developments are also expected to provide Expedia customers with real-time travel information relevant to their specific trip, including flight delay notifications and their flight’s assigned baggage claim carousel number.

Expedia is additionally seeking to create a more personalized search process in order to ensure that the options that they are presented with are the most compatible with their search terms. So if the customer is traveling with family, or on a weekend or looking for a VIP hotel experience, those are the choices that will appear on the first page of the search results.

Payment options are also about to broaden. “The measure of an easy booking has gone up,” Khosrowshahi noted. “Consumers want you to store their credit card information so they can put their finger on a button and transaction the way they want to transact.” As a result, Expedia is making multi-million dollar investments in Paypal and Bitcoin for consumers paying in any currency.

But as Expedia strives to continuously enrich the consumer experience, the travel-tech giant is, with the assistance of the same internal development teams, also launching many similar functionalities along with consumer-driven data on ExpediaPartnerCentral.com. So lodging partners can access tools such as Rev on their PC or mobile devices.

“Today, we bring about 450 million consumers to our sites every month and every visit is an opportunity to learn about our customer and what it is that attracts them,” the CEO told the conference audience. “Then we turn that around to share that information with you and give you self-service tools so you can reach the consumer who has the right expectation of our products. We have more global consumers coming to us on a global basis.”
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Miss Kerry Medina
Freelance Writer
Other (not listed above)
Kerry Medina, Freelance Writer
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