Expedia chief executive Dara Khosrowshahi has told a US technology conference that the business is only at “the very, very early stages” of its development in Europe.
When asked whether Expedia could compete against Priceline Inc’s booking.com, Khosrowshahi said that the market in Europe was “huge”.
Expedia and booking.com combined have only a 6% to 7% share of the overall European travel market, which he estimated to be worth $250m-$300bn, bigger than the US.
Khosrowshahi added that Expedia is “profitable and growing quite well” in Europe, although he admitted that it “is not executing quite as well as booking.com”.
Khosrowshahi said that Expedia’s purchase of venere.com in July 2008 was a key driver of its strategy in Europe, as the Italian bedbank gave European hoteliers the chance to distribute rooms through all Expedia Inc’s brands via the agency model.
“For smaller hotels, in second and third tier destinations, to whom cash-flow is more important, the agency model is more familiar and we now have that to offer them as well,” he said.
Expedia’s established merchant model remained “a very compelling proposition for big box hotels in large, fly-to tourist destinations because it affords package pricing, an opaque option which isn’t available for the agency side of the business”.
Khosrowshahi concluded: “Two years ago when we didn’t have a robust agency technology we were disadvantaged [in Europe]. Now we’re in a good position, and the trick is to figure out which hotels we offer merchant to and which to offer agency to.”