Expedia pushes to double share of online travel booking market

BY ARLENE MARTIN-WILKINS Associate editor news martina@jamaicaobserver.com

Tuesday, December 24, 2013

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WITH a hold of between three and four per cent of the global online travel booking industry, market leader Expedia Inc is by no means content with its position.


In the eyes of company executives, a more satisfying share would be six per cent of the more than US$1-trillion market, a target which the online travel agency (OTA) hopes to achieve in the medium term.


And if its success over the past years is anything to go by, the target is well within the reach of Expedia Inc, which started as a division of tech giant Microsoft Corporation in 1996 and has evolved from merely selling flights to offering packaged travel — flights, rooms, rental cars and other services — to destinations across the globe, including Jamaica.


The OTA outgrows the market year after year and 2013 is expected to be no different, with the first three quarters seeing revenue growths of 16 per cent, 13 per cent, and 15 per cent, respectively. And with eight out of every 10 industry experts predicting 2014 to be a better year for the travel industry, the innovative company is positioned to reap even better dividends from its strategic alliances and investments made over time in its tripod of strategic assets — its brand, its staff that number more than 12,000 worldwide, and its cutting-edge technology.


Among the biggest spend in recent times was on a global sales and marketing programme to push its brands — Expedia, Hotels.com, Egencia and Hotwire. Expedia offers full service travel planning, Hotels.com focuses on accommodation booking, Egencia on the business traveller, and Hotwire on the discount travel shopper.


"We are putting our money where our mouth is. In the last 12 months, we have spent over $2 billion on sales and marketing... to reach clients in China, Latin America, different parts of the Middle East and Russia to show them the amazing brands, services, products and destinations that you all represent," said Chief Financial Officer Mark Okerstrom at the company's 14th annual partner's conference, themed 'Travel Rising', at Caesar's Palace in Las Vegas, Nevada, on December 12.


Coupled with that, the company has spent US$500 million to enhance its technology to make the online platform more efficient and user-friendly.


"Every year we spend more and more in sales and marketing. And the reason why we are confident in doing that is that we have made some very, very significant investment in technology. Technology allows us to have truly industry-leading products whether on desktop PCs, Androids, IPhones; no matter what language you speak, no matter where you are around the world, we have a product that can open up the world of travel to you," Okerstrom told his nearly 3,000 partner representatives who attended the conference.


"... So, our mission is to continue on that: To continue to revolutionise travel through the power of technology. And, if you think where travel was back in the year 2000, back in 1995, it was very difficult to book a trip, particularly for someone who had never travelled before. And we, together, have given people the power of absolute, fundamental freedom to search and book the trip of their lives," he added.


"There is so much room to grow in this industry," he emphasised. "We are bringing the power of freedom to consumers. All of us together can make this a business that will continue to grow and thrive."


Expedia Inc President and Chief Executive Officer Dara Khosrowshahi pointed out that the constant rollout of new technologies has pushed the company from a prescriptive to a more emergent approach in shaping its corporate strategy.


"We have also changed how we operate as a company internally; whereas five years ago we spent a lot of time thinking about our strategy, what it is that consumers want, etc, the way we are shaping our company is different. Instead of trying to predict the future, we are building a company that can react quickly to the changes," he emphasised. "I think in this world, where technologies are turning over faster and faster, it is very difficult to predict the future."


"We have invested very heavily in our technology over the past five years. We have hired engineers all over the world, not just in the United States, but in India and in China in order to accelerate this pace of change, and have the leading technology," he disclosed.


As part of its innovative platform, the OTA has more than 130 websites in 36 different languages spread across 70 countries. What's more, it has invested heavily in mobile technology, recognising that the younger generation forms a large part of its client base.


"We now have to look beyond PCs," Khosrowshahi said, explaining that Expedia Inc's "simple and efficient" mobile applications have given clients the ability to plan their vacations, including booking flights and rooms, from any tablet or smartphone.


"If you think about online, and you are thinking about the PC, you are thinking about yesterday. You are not thinking about where things are going tomorrow," he noted.


"If you want to see where consumer usage is going, you have to look where their eyeballs are going. And eyeballs are moving to digital mobile devices. Mobile is the only [media] category that has had its share increasing," he said, pointing out that "mobile share of online travel" has increased three-fold from six per cent in 2012 to 18 per cent this year, while Expedia Inc's mobile room nights have increased by more than 135 per cent.


Another feature of Expedia Inc's platform is the 'multi-screen' experience, which enables clients to continue their search on multiple devices. "Research has shown that 90 per cent of online shoppers start their shopping with a handset or a PC and then go to a tablet, then they go to another device. So we have to make sure that the experience that these consumers have is consistent in an appropriate way across the devices," Khosrowshahi said.


Only recently Expedia Inc inked a strategic marketing deal with competitor Travelocity which will see Expedia powering the Travelocity site with its innovative technology. Analysts believe the partnership will help Expedia expand its reach and keep ahead of its nearest rival, the Europe-based Booking.com.


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