How Taipei is Building the City of the Future Sponsored This content is created collaboratively with one of our sponsors.
Expedia’s strategy is worth a shot: Focus on hotels and other core products while competitors the Priceline Group and TripAdvisor play around with restaurant reservations, and tours and activities. If Expedia sticks to its focus-on-what-we-got strategy, it is a huge gamble.
Does Expedia Inc. finally have an opening to make strides against Booking.com and TripAdvisor?
After all, consider that Booking.com doesn’t offer flights and cars, and has benefited over the years from its focus on hotels, and lately other types of lodging such as vacation rentals and apartments.
But the Priceline Group, of which Booking.com is the most important component, is getting into the restaurant reservations business with its $2.6 billion acquisition of OpenTable.
And TripAdvisor, which already has its hands full with the company’s year-old hotel metasearch product, just announced it will be acquiring tours and activities provider Viator for $200 million, mostly in cash, and in May it acquired European restaurant reservations platform Lafourchette.
Enter Expedia Inc., which has played second fiddle to Booking.com in the global hotel competition for years.
Expedia recorded an excellent second quarter that was propelled by 28% year over year growth in hotel room nights, of which four percentage points were attributed to its Travelocity partnership.
During Expedia’s second quarter earnings call July 31, CEO Dara Khosrowshahi was asked about his thoughts regarding competitors (the Priceline Group and TripAdvisor) getting into the restaurant reservations business and tours and activities (TripAdvisor) through acquisitions.
Khosrowshahi articulated a focus-on-what-we-got strategy:
“Well, I think that the travel market, in general, is a pretty big, broad market,” Khosrowshahi said. “And there’s plenty of product to offer and market to our consumers. In particular, if you look at Expedia, Expedia is really the only global multiproduct, broad online travel agency out there left, right? The only one that’s really trying to build a global presence.”
“It is a challenge to build a global presence across a number of products: air, packages, hotel, car, destination, services, etc.,” Khosrowshahi said. “And we believe that we’re just getting started. We’re investing in it very, very aggressively.
“And so we think we’ve got a pretty broad remit already. And at this point, we’re not looking to broaden it further. We want to get much, much better at what we do, and we think that we’ve got a long way to go there. And really, that’s what we’re focused on.”
There you have it.
Unless the Expedia CEO was being coy about potential acquisitions, it seems he’s fairly happy about the Priceline Group and TripAdviisor playing around with restaurant reservations and tours and activities.
We’re assuming — and this could admittedly be a questionable premise — that this is not just sour grapes from Expedia, and that it wasn’t an unsuccessful bidder for OpenTable, Lafourchette, or Viator.
Huge acquisitions and difficult integrations (LastMinute.com by Travelocity or eBookers by Orbitz Worldwide) can set companies back for years.
The Priceline Group, in particular, has made integrating acquired companies almost an art form.
But Expedia is apparently deciding to keep its head down and to see if the Priceline Group and TripAdvisor will stumble with these distractions.
On the other hand, restaurant reservations, and local tours and activities, may turn out to be a core element of the future of travel, and then Expedia’s strategy could eventually become a big setback.