According to the boss of one of the biggest players in online travel, the battle over who is winning the booking game will soon become a thing of the past.
“If I look into the future, the war for having the best booking experience is kind of almost over,” Expedia Group president and CEO Mark Okerstrom says, speaking at the company’s first-ever Research Summit in San Francisco last week.
“In many ways, the booking experience has become standardized. Not even just in travel; e-commerce in general.”
The next “vector of innovation,” he says, happens after the booking is made. “The days of driving huge conversion gains by changing the fields where you enter credit card information – there are diminishing returns on those types of changes.”
For Expedia, the question becomes how to change the experience from being “click-focused to customer-focused,” which Okerstrom believes is enabled through data (“data knows more about your business than you do”) and development in technologies such as artificial intelligence.
“It starts with creating a real vision and a real view on what [that future] could be.”
Test and learn … minus testing
Research, Okerstrom says, is critical in understanding Expedia’s customers – but not when it’s presented as a test-and-learn model.
“If I had my way, I would completely abolish the phrase test and learn,” he says. “I love testing, but test and learn is limiting. What you have to do is learn.”
If I had my way, I would completely abolish the phrase test and learn.
Mark Okerstrom - Expedia Group
Expedia has been able to innovate and learn because it has access to mass amounts of data, he continues, and “unlike some place like the Apple Store, we’re able to show hundreds of different versions of our store simultaneously,” he says.
“That, combined with deeply understanding customer problems in a way clicks don’t tell you – in questioning and in research and in watching facial expressions – that serves an incredible purpose. I don’t think there are many companies in the world, especially in travel, that have put those two things together.”
One challenge that remains is how Expedia makes its research locally relevant in markets around the globe.
“We look at what we’ve done in the U.S., and unless we’ve replicated that or made it better in every major market around the world, we haven’t met that objective,” Okerstrom says.
“It’s a gift and a curse: We were born in the U.S., and it’s a massive market … but there’s a bias we have that we don’t necessarily realize.”
Putting the “A” back in OTA
“I get a lot of customer emails,” Okerstrom says, “and I think the pain point that still exists is things go wrong when you travel, and bad things happen, whether the smell in the hotel room or whatever.”
Expedia, he says, is uniquely positioned to assist travelers when problems arise. “We’ve had this mantra of putting the ‘A’ back in OTA and putting the ‘agent’ back in travel agent,” he says.
“I don’t think it’s necessarily going to be agents on the phone, but what will differentiate us is to truly be able to help people be able to advocate [in situations].”
Looking back at the first 20 years of OTA existence, Okerstrom says the period was primarily about putting the power of booking into the hands of individuals.
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“There’s been a real vector of competition in OTA land” and among who will be the first to be the best in various channels.
“Google SEO created TripAdvisor; Google SEM created Booking; in mobile, for a moment, there were certain players ahead and behind,” he says.
“With all those things now neutralizing, [we’re moving into] the next vector, which is why we’re so dead-focused on customer centricity.
“If you book with any Expedia property, you’re going to be in great hands. It makes it irrational for anyone to book with anyone else. That’s the next vector of competition - it goes way beyond booking.”
The competition
Some of Expedia’s competitors, however, he suspects may have more trouble keeping up.
“It’s hard to change any company’s DNA. If you look at TripAdvisor, it’s been hard for them.
“When you build a business on people writing reviews for free that gets you traffic for free that you sell for more than free - when those dynamics change - how do you change your DNA? How does Booking change its DNA?” he says.
“We started 20 years ago with having a one-stop shop. All this bluster around tours and activities? Whatever. We’ve had that for 20 years,” he continues, adding that he finds some of the valuations in the tours and activities space “head-scratching.”
“We’ve had 20 years of practice. … If we execute well, I don’t think anyone can touch us.”
Mark Okerstrom at The Phocuswright Conference
The Expedia Group CEO will speak at the 2019 event in Florida.
* This reporter's attendance at the event was supported by Expedia Group.
* Pic via @markokerstrom on Twitter.