Phocuswright: Expedia aims to ‘shift balance’ with Europe growth focus

Expedia plans to focus on growth in Europe as it seeks to shift the balance of its business to mirror the global travel marketplace.

Expedia plans to focus on growth in Europe as it seeks to shift the balance of its business to mirror the global travel marketplace.

Dara Khosrowshahi, president and chief executive of the global OTA, told this week’s Phocuswright conference on Los Angeles an over-reliance on the US was not a problem as it was booming.

Currently Expedia generates around 52% of its business from the US, whereas the market represents only 30% of the global market.

But Khosrowshahi said Expedia should reflect the global industry and that it can achieve a better balance of US versus internationally sourced business in five to seven years.

“We essentially want to look like the global marketplace. That’s going to require us to get much bigger in Europe and makes what we are doing in Asia and Pacific all the more important.

“It requires us to execute well and Trivago to grow at the out-sized growth rates it’s achieving now for some time.”

Khosrowshahi was optimistic for the travel sector in general saying business was healthy and growing ahead of GDP globally.

He said Expedia was benefitting from the even faster growth in online travel and particularly in mobile travel.

“A lot of travel companies are doing well and we are one of them,” he said.

Expedia has been investing heavily in Asia with an eye on future growth and has a partnership with eLong in China and a joint venture with Air Asia.

“We are one of few western companies that has a significant position in the Chinese market,” said Khosrowshahi. “Lots of Western companies have gone in there and failed.

“We have seen the competitive environment in China get a lot tougher and we have to up our investments in China even more aggressively.

“That’s what you have to do in China. Either you have to be in or get the heck out. We think we are building a huge asset there.”

One area of focus will be on the corporate travel sector through Egencia, which Khosrowshahi said was proving it could serve the larger businesses.

It now provides travel services to PNG and has recently won the Ikea business.

Khosrowshahi said it will be grown organically although he did not rule out acquisitions of traditional TMCs that could be integrated with Egencia’s technology.

Asked about whether Expedia would participate in TripAdvisor’s Instant Book functionality Khosrowshahi ruled it out unless there were “very significant changes”.

And he predicted the blurring of the lines between search and transaction would continue. “It’s clear the experiences are running into each other,” he said.

“There is some friction out there between having a complete search experience and a great booking experience. These two will continue to come together. Where it will go, we will see.”

Khosrowshahi said Expedia’s response is to have flexible technology that can react quickly and can test and learn “at speeds we have never done before”.

Although it does not make a lot of money from selling flights Expedia is investing in its offering in an area that continues to drive a huge amount of traffic, said Khosrowshahi.

Expedia is working with Amadeus on branded fares and will look to innovate the customer experience with FlightTrack 5.

Khosrowshahi said there had not been a lot of capital investment in air but that Expedia wanted to bring some of the functionality seen on the hotel space and be the best airfare website available.