Mark Okerstrom, President and Chief Executive Officer of Expedia Inc.
Expedia Inc is a giant of the travel industry, with its fingerprints in online travel agencies, metasearch, corporate travel, affiliate services, and more. But its leader quit for the top job at Uber in the summer.
The former-CFO of the company talks to Kevin May about keeping an eye on Google, what the direct debate should really be about, and diversity in the company.
Much is made, often for an incoming president in the US, about the first 100 days in office. What do you hope to have achieved in your first centenary of days in the new role?
Well, I will be meeting with our employees, speaking with our partners and, when get the opportunity, speaking with our customers – essentially trying to collect the rest of the information that I did’t collect over the last 11 years to figure out what we need to do differently. That’s priority number one.
Secondly, I’ve been clear from the start that I do have a couple of pretty important focus areas: our global expansion effort, in particular, moving to a position where it is not just about planting more flags but being locally relevant, on a local basis. I want to get very quickly to real hard decisions and priorities around where we’re going to focus our time.
I want us to be more customer-centric than we have done in the past – there’s an opportunity there. I want to see our brands - and myself - come up with more concrete plans on that front.
Lastly, organisationally, I want us to move much more quickly. With clear priorities around global expansion and customer centricity, combined with better organisational alignment around those goals, we should be able to move much faster.
If we get those things done, I will feel we will be able to start 2018 in a good spot.
Occupation
President and CEO
Working alongside Dara Khosrowshahi obviously gave you a solid example of how to oversee a business like Expedia. But what has surprised you about the job so far?
To be honest there hasn’t been a ton of surprises. When you speak about working alongside Dara for a long time, I did physically work alongside him for long time.
One thing that I could call out is different in a more positive way that you might expect, is that when you run a big part of a business operationally, which I did, you have real day-to-day responsibilities that even though you are jointly leading the business, they pull you away from some of the things that you might be interested in, so you simply do not have the time to get to.
One of the pleasant surprises is that now I just have time to put into those things that I think are important to the business. They don’t have to be in finance, or M&A, or the ecommerce platform team – so that’s a pretty exciting spot to be.
And, would you concede that there are some aspects of the role that you need to learn fast on?
I’m a big fan of learning – period. There are lots that I have to learn about a lot of things.
That said, i do have a pretty comprehensive knowledge of the business and understanding of what this role entails, but I’m always trying to learn and go deeper into the business and where we need to go.
Chains or independent hotels should be competing against each other, to give consumers the best experience in their properties – that’s how you build a direct business and loyalty.
Mark Okerstrom
What part of the Expedia empire excites you most, both from an opportunity to innovate and to grow?
You want me to pick favorites amongst my children! Honestly, i’m excited about it all.
HomeAway has a massive opportunity ahead of it – it really is just starting and the industry itself is growing very quickly, and HomeAway is transitioning to an online bookable product that consumers and partners are loving. There’s a lot of excitement ahead for HomeAway.
I continue to be a big believer in Trivago and it has a great runway ahead of it. Egencia, the fourth largest corporate travel business in the world and really the only tech-driven one – that’s highly exciting.
And the core OTA business (brand Expedia, Hotels.com, Expedia Affiliate Network and all of our regional brands) – this is essentially the platform that powers travel around the world. There’s really no other multi-product, multi-segment in terms of corporate, online, multi-brand, which moves anyone from anywhere to anywhere in the world.
We are the only platform for it and we are just at the early stage to realise the full potential.
But what’s the strategy behind having a number of consumer-facing brands in the family?
We have essentially a multi-product marketplace that has air, car and hotel products – so from the supply side of things it is one integrated platform. We then have a number of consumer brands that are interfaces to the customer side of the world that all have their own unique value propositions.
By having all of those brands, ultimately we are giving consumers what they want – which is choice. Consumers love to shop around and create affinities to different brands.
We want to be in a position to provide consumers with all the brands, all of the choices, and not have any reason why they shouldn’t book their trip with us.
Now, it is more than just a brand in terms of the logo – they have different marketing strategies, different front-end technology, so there’s more to it than just a brand. They are all empowered to do to go after their target markets.
What would you say is the biggest challenge to what Expedia does, and what do you do about it?
The biggest challenge for us is complexity. We do a lot of things and there are lot of people in this organisation, all charging in their own, innovative directions.
From my perspective, leading this company, we’ve just got to be very clear about what the top priorities are, and get all the teams aligned against that and let them loose to do what they need to do.
There are accusations that between you and your competitor, in some regions, it almost a duopoly. What do you say to people who throw that in your direction?
I think it’s ridiculous - it’s a $1.4 trillion industry.
We are in all aspects of it – corporate, unmanaged corporate, travel agents, OTA – but it is less than 6% of the overall industry.
The direct booking debate has warmed up again in recent years, so how do you respond to hoteliers who say the best route for is to go direct than through intermediaries?
It makes sense for them to try and build their direct business. The rhetoric that you read in the media – us versus them, chains versus OTAs – is overblown.
The right way to think about it should be chains or independent hotels competing against each other, to give consumers the best experience in their properties – that’s how you build a direct business and loyalty.
The fact is, people are going to continue to go to Google, OTAs – we’re growing at rates of four-to-five faster than the chains, in terms of revenue and room-night growth, and I don’t see that ending.
The important thing, in the midst of all these channels that consumers what to go, is how hotels adequately compete in those channels so they can take share from one another, and how do they give that traveler an amazing experience so that the next time they go to one of the chain hotel sites directly.
This is great - we’re absolutely fine with being a source of new customers. But if they do go back to an intermediary, how do you make sure that they pick your hotel next time and not your competitor’s.
That’s where the dialogue needs to go.
You're always going to say Google is a good partner - but would you say your roughly $4 billion with it annually is worth it?
To date it has been money well spent. Google has a good source of new customers for us; it’s been a great way to enter new markets without taking the risk of big television campaigns.
That said, we certainly watch they do with caution. They have been innovating in the travel sector, to make their product better and make the leads they deliver us more qualified. As long as they continue to innovate in that vector they will continue to be good partners for a long time to come.
But we always, from a technological and product perspective, also try to stay one step ahead in terms of giving customers and partners an amazing experience.
Do you think the industry or travellers drive the evolution of the business?
Ultimately it’s got to customer-led. But what we’ve found many times is that customers do know what they want until you show it to them and requires the industry to innovate.
We’ve been very vocal in our belief in the scientific method and that we do not have all the answers in terms of what’s best for the traveler. So we test everything.
It’s absolutely traveler-centric and customer-centric but we as an industry have to innovate and give them the opportunity to choose the innovation that works best for them.
With clear priorities around global expansion and customer centricity, combined with better organisational alignment around those goals, we should be able to move much faster.
So, some questions about you... Surely there will be a part of you that misses the chief financial officer position. What might it be?
It hasn’t been long enough for me to develop significant fondness for things that I’m missing!
I loved a lot of the technical part of being a CFO, digging in to the tax structure work, the foreign exchange operation – so it’s a lot of things like that, where you can go deeper and really learn from some of the experts that work for us.
How do you choose who to hire when faced with two equally qualified people?
Generally, I try to hire for the team. I look at how the team is positioned and what extra skills do they need, how are they positioned in terms of diversity.
We’ve been trying really hard at Expedia to get truly gender-balanced team, and proper representation in the leadership roles. So, yes, one of the key things I am looking for is diversity.
When was the last time you spoke to one of your travelling customers, and why?
I had a pretty good dialogue with a customer a few days ago, via email. They had a product idea and it was bugging them about how they wanted to see a feature on their itinerary, so I went back and forth with on it and looped in our head of product for brand Expedia.
And, finally, are you the 24/7 IT support in your own home?
Haha... Absolutely! But not exactly 24/7 because I am probably only at home 24/2. My office hours are little bit hard.
But I am generally the go-to guy!
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