Expedia Inc has released its second quarter earnings. (Here are the topline financial numbers.)
CEO Dara Khosrowshahi held a conference call with investors. Below are the highlights of what he said that are relevant to the travel technology trade.
Google
"We do see Google making some moves in the area [of facilitated bookings].
I'd say one thing that we see that's different with the Google treatment of hotel bookings [compared to TripAdvisor's instant booking product] is that the Google treatment tends to be much more clear that the booking is actually with the OTA and that Google is not the merchant, etc., it's really just making the payment process easier rather than trying to own the customer.
So we do anticipate testing out with Google and testing out some of the other treatments and seeing how it affects our customers and customer satisfaction and our economics in general."
HomeAway
Vacation rentals continues to be a category that Expedia Inc brands flirt with. The company is expanding its partnership with HomeAway, the world's largest platform for vacation rentals, from just the US to also include "certain European markets".
Speaking more broadly about vacation rentals as a product category, Khosrowshahi said:
"I don't think we've hit on a magic bullet at this point. We don't see the additional [vacation rental] inventory materially increasing our revenue per shopper.
But we think the customer experience at this point isn't what it needs to be. And we think we can materially improve the customer experience and we're hoping that will add to our customer satisfaction."
Ryanair
Khosrowshahi said he saw Ryanair's effort to lead airlines out of online travel agency channels as an outlier. Expedia Inc's relationships with its air supply partners have been getting stronger, not the other way around, he said.
"We haven't seen any effect from Ryanair. They're a very strong company that tends to be vocal, but I don't think they're necessarily representative of the industry worldwide.
We have very strong long-term contracts with our air supply partners....
We are moving from being a commodity provider of low-price and schedule information to becoming a value-added player when it comes to selling air....
We are adding features such as branded fares,... which help assists the airlines in the sale of ancillary products, such as a choose-your-seat service [for a fee]."
Expedia Inc sees accelerated room growth
Expedia added more properties in the first half of 2015 than it did in all of 2014.
Khosrowshahi said that the majority of the 27,000 hotels it added in the past three months came from "organic acquisition." The company has invested in its market manager force. Most of its new hotels came from direct sign-ups those market managers brought in.
But the global conglomerate also enjoyed a inventory bump from its acquisition of online travel agency Wotif.
"For room night acceleration, it's a game of inches with a lot of inches coming together to deliver results at once."
Expedia Lodging Partner Services began to make the approximately 20,000 hotels that are on the SynXis Central Reservation platform run by Sabre Hospitality Solutions available via Expedia’s global portfolio of brands.
But a lot of those hotels were already on Expedia Inc brands via other channels, the CEO said.
One caveat: There are now about 257,000 properties on Expedia, Inc. brands. As the company adds more "long tail" properties, they tend to be smaller hotels that contribute less per property to Expedia's bottom line.
That is why the global giant is redoubling its efforts at perfecting its loyalty programs. The CEO said:
"Repeat customers account the for majority of the profit of the company."
Instant reviews
The company's flagship brand online travel agency Expedia has begun to roll out instant reviews, or Real-time Feedback, which gives feedback to hotels while guests are still at the property.
Travelocity
Travelocity continues to see exceed expectations in its contribution to revenue and profit to Expedia Inc. and it has fully moved over to the Expedia IT platform.
Tours and activities
In the past few months, Expedia mobile app customers became able to book local activities and ground transportation from their phone with the Expedia app on iOS and Android.
"A coming benefit is going to be our increased merchandising of mobile offerings to consumers during the trip. If we know you've flown into New Orleans, and you've downloaded the Expedia app, we can offer you activities in the city."
China
Khosrowshahi insists that, despite Expedia having sold off its stake in the online travel company eLong, Expedia is still committed to the fast-growing Chinese market.
He said the China outbound market is the largest growing opportunity of its kind for Expedia. But the company has to experiment to find its way there.
"The Chinese customer is quite different in what they're looking for, in their behavior, and in their device mix, than our traditional markets. So it's a market that has been, in general, difficult for Western companies to reach. But that doesn't make it impossible.
So we see our exposure going forward being partially organic through the building up of some of the brands that we have there and then partly through partnerships with eLong and CTrip in certain aspects of the business.
And then our Expedia Affiliate Network (EAN) business going out and offering our global inventory, both on a stand-alone basis and on package basis, with the kind of scope that we have -- that has proven to be quite interesting to local Chinese travel providers.
As you can imagine, the Chinese outbound business is quite package-related.
We see that the partnership opportunities there are already pretty strong but that we have a lot of runway ahead of us."
A Tnooz side note: The New York Post says that a source in the US Department of Justice told it that the Expedia acquisition of Orbitz will be approved by the end of the summer.