Expedia.com as Leading Online Travel Brand

Expedia, founded in 1996, is one of the world’s leading full-service online travel brands now, by helping travellers easily plan and book travel from the widest selection of vacation packages, flights, hotels, rental cars, rail, cruises, activities, attractions, and services (“Expedia | Expedia Group”, 2020). It is one of the brands from Expedia Group.

Expedia value proposition: “You can book everything in one place—if something goes wrong, we can solve your problem in one place.” – Mark Okerstrom, president and CEO of Expedia Group

Travel Industry Giant Expedia Group Still Sees Room To Grow (Goldstein, 2018)

Expedia Group reported total revenues of $11.2 billion in 2018, its revenue has grown at a CAGR (compound annual growth rate) of 19% since 2016. It reported a gross booking of $99 billion (the total dollar value of transactions through agency and merchant bookings, which includes air tickets and other categories). Room bookings remain the key service category for Expedia Group as compared to other services such as air tickets and rental cars. It reported room nights of 352 million in 2018.

There are three general ways how Expedia Group generate revenues (Team, 2019):

• Merchant Revenues: These are commissions received from the customer for travel-related transactions, where the company receives booking payments from the customer.
  • In 2018, merchant revenues for Expedia Group contributed 53% of total revenues, which is the main way the company doing their business.
• Agency Revenues: These are commissions received from the service provider for travel-related transactions, where the company does not receive booking payments from the customer.
  • Agency revenues contributed 27% of total revenues in 2018 to Expedia Group
• Advertising Revenues: These are revenues earned from referrals, advertising placements, and subscription fees.
  • The company received Advertising Revenues of around $1 billion in 2018.

As a large travel site, the brand Expedia.com gets its users from search, social, referrals, direct type-ins and paid channels. Expedia tailors its user experience for visitors coming in from each of these channels to maintain its conversion rate. Conversion rate optimization(CRO) is a major concern for a business as large as Expedia’s, and it does a great job of CRO best practices and innovations (Shaihob, 2016).

“When you’re dealing with tens of millions of transactions every year, even a 0.2% bump in conversion rates can translate into millions in extra revenue.”

An in-depth analysis of how Expedia converts visitors into customers

For example, Expedia promotes its blog on its Twitter handle instead of the main website, which is promoted on the company’s Facebook page for different target audience segments. It also promotes its other social channels such as Snapchat through pinned tweets and custom logos.

As a Marketplace of digital business model, Expedia working as an intermediate in between the service suppliers their customers.

Through the company’s “direct connect” technology, the proprietary supplier-oriented technology that streamline the interaction between some of their websites and hotel central reservation systems, making it easier and more cost-effective for hotels to management reservations made through Expedia brands.

 “An important component of the success of our business depends on our ability to maintain our existing, as well as build new, relationship with travel suppliers and GDS partners (global distribution system)”.

Expedia Group, Inc. Business Description

Expedia as A Product

To attract customers, Expedia differentiate their brand from their competitors primarily based on quality and breadth of travel products, channel features and usability, price, traveller service and quality of travel planning content and advice. From a product view, here are three main reasons why Expedia would be successfully sold to its customer: useful, easy to use, and trustworthy (Yu, 2015).

Useful

At the beginning of its launch, back in the late 1900s, as an online travel agency (OTA) it enables customers to discover and compare prices for travel at the click of a mouse. Imagine the old times, people have to go through the tedious process of calling up their travel agent and asking about pricing information for various travel permutations. By now, due to the great partner relationship of its suppliers, Expedia could provide an inventory coverage over one million bookable properties and over 500 bookable airlines.

Easy to use

Easy to discover travel options with widgets, filters, easy to understand text descriptions, rating snapshots, map views, and informative messaging such as “did you know you can cancel most reservations within 24 hours free of charge?”.

• “Recommended“, powered by sophisticated algorithms that take data collected from previous uses and gleans insight on what may be relevant to the next traveller;
• “Scratchpad“, save a user’s searches into their history, make their search easy to stay organized, update the change of price since their last search;
• “Autocomplete“, provides 1-click Facebook login; efficient checkout process with various payment options accepted;
• Timely email confirmation, as soon as the transaction finished, there would be a timely email confirmation with itineraries sent to customers inbox, which can be seen as a rewarding booking experience.

Trustworthy

Expedia provide 24/7 customer support, to defence in addressing customer frustration. As an indirect service provider, they always make sure they communicate with their suppliers get accurate information, so there are no surprises as misdescription with any products they provide. There is a review system that collects reviews only from verified hotel guests, which helps shoppers with a credible lens to evaluate the hotel. In addition, the real-time reviews creating data loops that will in the long run improve data accuracy on Expedia and set expectations for customers on par with what they will actually experience.

Further Technology Investment

The Rise of Mobile

Expedia’s mobile apps, offer compelling advantages to its customers in the area of price, convenience, ease of travel (Yu, 2015).

• Price
  • Steep discounts on same-day hotel bookings for the last-minute, on-the-go traveler who is looking for a hotel that night and does not have access to a desktop computer, but would be able to book a hotel via his mobile device.
• Convenience
  • No need to print out itineraries
  • No need to search through one’s inbox to find itineraries
  • All seat in the app
• Ease of travel
  • Push notifications to give travelers reminders when their flight is departing
  • updates on any gate changes or plane delays.

“We’re focused on machine learning algorithms and creating consumer behaviour models that identify patterns. That allows us to know when to present the right set of options in the right context and at the most meaningful time.” – Gabriel Garcia, Global Head of Mobile Marketing & App Ecosystems at Expedia

[Video] How Expedia Brings the World Within Reach

Expedia with Google

With the aim of easing the booking process for its users, Expedia is currently working on incorporating AI technology into is online travel business. The integration of AI technology could enable users to book or cancel flights and hotel reservations with voice commands on Alphabet’s Google Assistant from any device. Also, users will be able to access information about their Expedia trip itineraries as well as packing lists for upcoming trips with a simple voice command (“Online travel demand spells further success for Expedia”, 2019).

Above all, Expedia becoming a successful online travel agency due to its huge investment and forward thinking of technology application. As a digital platform, its impact to the traditional travel agency is huge. However, rather seeing Expedia as an competitor, it would be more constructive and create more opportunities with the collaborate between online and offline businesses in the travel industry.

References

Expedia | Expedia Group. (2020). Retrieved 4 March 2020, from https://www.expediagroup.com/brands/expedia-com/

Goldstein, M. (2018). Travel Industry Giant Expedia Group Still Sees Room To Grow. Retrieved 5 March 2020, from https://www.forbes.com/sites/michaelgoldstein/2018/12/14/travel-industry-giant-expedia-still-sees-room-to-grow/#a494e991bb28

Online travel demand spells further success for Expedia. (2019). Retrieved 5 March 2020, from https://www.onlinemarketplaces.com/articles/23110-Online-travel-demand-spells-further-success-for-Expedia

Shaihob, D. (2016). An in-depth analysis of how Expedia converts visitors into customers: Part one – Econsultancy. Retrieved 5 March 2020, from https://econsultancy.com/an-in-depth-analysis-of-how-expedia-converts-visitors-into-customers-part-one/

Team, T. (2019). Booking Holdings And Expedia Are Both Growing Steadily, But In Very Different Ways. Retrieved 4 March 2020, from https://www.forbes.com/sites/greatspeculations/2019/08/26/booking-holdings-and-expedia-are-both-growing-steadily-but-in-very-different-ways/#6454e19b1f04

Uenlue, M. (2017). Business Model Canvas Expedia. Retrieved 5 March 2020, from https://www.innovationtactics.com/business-model-canvas-expedia/

Wahl, K. (2019). [Video] How Expedia Brings the World Within Reach | Criteo. Retrieved 6 March 2020, from https://www.criteo.com/insights/how-expedia-brings-the-world-within-reach/

Yu, P. (2015). Here’s What Makes Expedia a Great Product. Retrieved 4 March 2020, from https://medium.com/@peteryu/why-expedia-is-a-great-product-and-a-glimpse-into-the-future-of-travel-84156641b275