On a flying visit to Sydney for Expedia’s 10th birthday, CEO Dara Khosrowshahi has opened up about the travel giant’s Australian business, the integration of Wotif, its “neutral” position on Google, and the pros and cons of selling TripAdvisor.
In a wide-ranging conversation that also covered caffeine, energy drinks and the New York Times, where he’s now a director, Mr Khosrowshahi said Expedia Australia has made huge strides in the past decade.
“We now do more (revenue) in a week than what we did in the first year here,” he said.
The acquisition of domestic accommodation market leader Wotif has been a big reason for that, although there’s plenty of scope for improvement.
“We’re seeing some good early results out of the Wotif and Lastminute brands but I don’t think we have fully optimised Wotif and its market capabilities.”
He said Wotif’s Australian domestic travel market skew is an ideal foil to Expedia where “the market we’re really interested in is the inbound market.
“Our inbound volume is growing by over 50% on a global basis and of course Australians also love to travel so it has been a perfect match.”
Now that Wotif has fully transitioned onto Expedia’s tech platform, the focus is on re-inventing the brand, which has traditionally been positioned as cheap.
Wotif will now be known as “The home of holidays”.
The relaunch is being supported by large, diversified marketing campaign and that will see the brand back on Australian TV for the first time in three years.
TV is a medium that’s been working well for a variety of Expedia’s brands, said Mr Khosrowshahi, raising awareness and visitors to its site.
There’s a strong correlation between running TV ads and click spikes, he said.
But the vast bulk of Expedia’s advertising spend still goes to Google, which recently introduced a commission payment model for hoteliers that sell rooms through its new, improved meta-search booking engine.
In other words Google is now a direct competitor of Expedia and the other OTAs which pays them billions each year in advertising dollars.
How does this make him feel?
“We are neutral on Google,” he deadpanned.
Mr Khosrowshahi said Expedia is working hard to diversify its advertising mix and apart from search also competes very aggressively on all major meta-search sites.
It also majority owns Trivago, the German-based meta-search engine.
Meanwhile, Mr Khosrowshahi was reflective about selling meta-search market leader TripAdvisor in late 2011.
“Do I wish TripAdvisor was part of the company now? Yes.
“But I don’t regret selling it off because at the end of the day Expedia’s shareholders are my boss and the value of TripAdvisor wasn’t reflected in the share price.”
No such problems these days with investors buying into the Expedia story and the share price quadrupling from USD$29 at the end of 2011 to USD122 yesterday.
- Recent acqusition Orbitz is being integrated but will continue operating on its own platform for now.
- Traditional travel agents are one of Expedia’s fastest-growing channels.
- Expedia “really believes in the scientific method” – there is no good idea, no bad idea. Just test it and measure it.
- The company has monthly meetings involving product owners in which new ideas are discussed, evaluated and possibly tested.
- An idea can go from conception to being tested on one of Expedia’s 50 sites within a week
- New ideas are generally tested first on one of Expedia’s English-language sites in the UK, US or Australia
- If consumers like it the idea will be rolled out across the network
- About a third work, a third fail while with remaining third generally “nothing seems to happen”.
And with that, Mr Khosrowshahi was whisked away to his next appointment.