Who is Dara Khosrowshahi
Dara Khosrowshahi is president and CEO of the Expedia group, which operates more than 150 travel booking sites in more than 70 countries worldwide across its portfolio of online travel brands including Expedia, Hotels.com, Hotwire, Egencia, Venere, trivago, and eLong in China. Under his leadership, the Expedia group has grown to become the largest online travel company in the world. Khosrowshahi also serves as president of the Brand Expedia business, where he is responsible for the overall strategy and operations of the Expedia brand globally, with a focus on driving innovation and positioning the Expedia brand for further international growth. He has served as a member of the Fanatics.com board of directors since November 2013.
Previously, Khosrowshahi served as CEO of IAC Travel, a division of InterActiveCorp. Khosrowshahi was instrumental in the initial expansion of IAC’s portfolio of travel brands, which now comprise the Expedia group. He served as Executive Vice President and Chief Financial Officer of IAC, overseeing all of the company’s financial matters, and also held the role of Executive Vice President of Operations and Strategic Planning at the company. Prior, Khosrowshahi served as President of USA Networks Interactive, having joined the company in 1998 as Vice President of Strategic Planning.
Prior to joining IAC, Khosrowshahi served as Vice President at Allen & Company LLC. Khosrowshahi holds a BA in Engineering from Brown University.
Who is the Expedia group
The Expedia group is the largest online travel company in the world, with an extensive brand portfolio that includes some of the world’s leading online travel brands, including:
- Expedia.com®, the world’s largest full service online travel agency, with localized sites in 31 countries
- Hotels.com®, the hotel specialist with sites in more than 60 countries
- Hotwire®, a leading discount travel site that offers opaque deals in 13 countries on its 12 sites in North America, Europe and Asia
- Egencia®, the world’s fifth largest corporate travel management company
- eLong™, the second largest online travel company in China
- Venere.com™, the online hotel reservation specialist in Europe
- trivago®, a leading online hotel search company with sites in 39 countries
- Expedia Local Expert®, a provider of in-market concierge services, activities and experiences in 18 markets worldwide
- Classic Vacations®, a top luxury travel specialist
- Expedia® CruiseShipCenters®, one of North America’s leading retail cruise vacation experts
The company delivers consumers value in leisure and business travel, drives incremental demand and direct bookings to travel suppliers, and provides advertisers the opportunity to reach a highly valuable audience of in-market travel consumers through Expedia Media Solutions. Expedia also powers bookings for some of the world’s leading airlines and hotels, top consumer brands, high traffic websites, and thousands of active affiliates through Expedia® Affiliate Network. (NASDAQ: EXPE) Corporate and industry news and views, can be found at www.expediainc.com and Twitter @expediainc.
Insights from a World Travel Leader
In this interview I have asked Dara to share his vision about some of the most relevant topics now and in the future for the On Line Travel Intermediaries (OTIs), to better understand them and have the reference of how Expedia is planning to face them. Thus, the next questions/answers provide very valuable insights, clearly food for thought for the travel industry players.
Javier: Is your company defining a comprehensive omni-channel strategy?
Dara:: Absolutely. Our goal is to meet consumers where they’re at. So whether that means they want to search for and book travel from their mobile device on one of our brands’ mobile Web sites or apps or be alerted to great deals on Facebook, or reach a customer service agent by phone, we have the channels open and available to make any of those scenarios possible.
Beyond the omni-channel approach, we also offer a multi-brand approach. The Expedia group portfolio includes one dozen online travel brands that each cater to a different type of traveler. For instance, our flagship brand Expedia is a full-service travel site offering virtually every product and service a leisure traveler could need – hotel, flight, rental car, cruise, activities, etc. Hotels.com and Venere.com, on the other hand, each specialize in lodging accommodations; while Hotwire serves a more last-minute deal-conscious traveler; our corporate travel provider Egencia serves the business traveler; eLong is the second-largest travel site in China; and trivago is a leading hotel search site and the most recognized hotel search brand in five key European markets.
Javier: Which elements do you consider key success factors in your business model?Dara: The Expedia group is the largest travel company in the world, yet still only represents approximately 3-4% of a $1 trillion global travel industry. Though our brands today already operate more than 150 travel sites in more than 70 countries, we believe there remains a significant opportunity to expand internationally given the continued shift in offline to online travel booking trends, including in emerging regions like Asia and Latin America.
Our passion for revolutionizing travel through the power of technology is evident in some of the major strategic initiatives we’ve undertaken within the last several years, including the global rollout of the Expedia Traveler Preference (ETP) program, giveing consumers the choice of when they want to pay for their hotel stay. Our data shows that not only do consumers value the choice and flexibility that ETP affords them, but participating hotels also benefit from their involvement in ETP and as a group are performing better than hotels that do not participate in the program.
Now as mobile emerges as a more popular channel for travel, we have made the conscious decision to invest in efforts there and our brands are making great progress in building very beautiful and useful mobile Web sites and apps for those on-the-go travelers. Collectively, our brands have achieved nearly 80 million app downloads since launch, and our apps are being downloaded at a rate of more than 200 times per minute.
Javier: Do you consider that other goals (impressions monetization, software as service revenue, etc.) should be part of the business model or should they be treated separately?
Dara: We like our brands to be run fairly independently, as it enables them to act with speed and decisiveness and act upon the strategies they think will best position their brand for success. trivago, for example, is really ad and media focused whereas most of our other brands are focused on core travel bookings. It wouldn’t make sense for trivago to have to operate within the same parameters as the rest because it’s an inherently different type of business.
Javier: Do you see differences between metasearch companies that specialize in hotel vs. air?
Dara: Essentially all metasearch sites serve a similar fundamental purpose, which is to surface to consumers the broadest view of available rates – whether that’s for flights, hotel, car, etc. – in a single search. Where I think the difference lies between metasearch sites specializing in different products – flight versus hotel, per se – is that there are many more hotels worldwide than airlines, making for a more complex shopping experience with many more options. trivago, for instance, compares prices across more than 200 hotel booking sites for more than 700,000 hotels worldwide, giving consumers the ability to view a wide selection of rates and enabling them to make a decision about which hotel to book, confident they’re getting a great deal.
Javier: Do you think metasearch companies are a distribution channel, or a “set and forget” marketing initiative, or an advertising model that typically utilizes the CPC advertising format and requires daily spend and bid management, daily reaction to what other advertisers are doing, monitoring of budget spend on a daily basis and monitoring of rate parity?
Dara: I think like any advertising channel, it’s important to actively manage your position in the metasearch environment. We take a very quantitative approach to our marketing spend and measure the return on investment we make in each channel. We benefit from our large scale in these efforts because we can quickly reach statistical significance in a marketing channel and react to what the data tells us.
Javier: What is the impact you forecast in the future of metasearch in the OTA business?
Dara: We think metasearch has certainly proven its place in today’s online travel environment, and we believe it can be a valuable marketing channel for OTAs with already-strong hotel inventory to showcase great hotel rates and deals to consumers.
Right now, the Expedia group is making investments in our hotel metasearch brand trivago, as we see this business expanding globally over the next several years and becoming a hotel search destination for consumers the world over. We indicated on our third quarter earnings call that trivago was on pace to grow revenue 85% compared to the previous year, so we’re confident in this model and the value it offers to consumers.
And to give you a sense of the interplay between metasearch sites and OTAs, PhoCusWright data estimated that OTAs in 2012 received nearly half (48%) of all downstream metasearch traffic, so that’s pretty significant.
Javier: What is your opinion about responsive design in relationship with travel companies?
Dara: The user experience – regardless of whether a consumer is visiting the Expedia site on their PC, tablet or mobile phone, for example – should be seamless across all platforms. Responsive design makes that a reality.
Javier: Is your company better for responsive design or do you have a different strategy?
Dara: Many of our brands are making key investments in developing responsive sites, meaning pages will be able to adapt based on device size, type and browser capabilities. While it is a major task, and not one that every player in the travel industry will be able to undertake, we believe it will ultimately differentiate the Expedia group brands from the rest of the industry.
Javier: Due to the level of complexity involved in developing for different platforms, do you think travel companies should rely on third party tech companies or keep [development] control in house?
Dara: At our core we’re a technology company that is passionate about travel, and as such we’ve made and continue to make significant investments in developing truly beautiful and compelling online and mobile travel booking experiences for consumers. In fact, within just the last twelve months (ending September 30, 2013), the Expedia group spent nearly $500 million on improving technology and content. And the travel suppliers that partner with the Expedia group benefit from those investments, as they get access to showcase their own products and services on our best-in-class online platforms without having to build it themselves.