Even large online travel agencies like Expedia need marketing partners, and that is where the metasearch sites come in. In Expedia's view, its own subsidiary Trivago is helping Expedia compensate for the traffic it is losing, and will continue to lose, from TripAdvisor.
Expedia Inc. reported a healthy third quarter, with global hotel room nights sold jumping 24%, but Expedia expects to start losing its share of traffic from its largest metasearch partner, TripAdvisor.
That was the word from Expedia CEO Dara Khosrowshahi, who said that as TripAdvisor expands its ability to process hotel bookings directly on TripAdvisor websites and in its apps instead of providing leads to online travel agencies, Expedia expects to lose the share of clicks it has come to expect from former subsidiary TripAdvisor.
Expedia has refused to participate in TripAdvisor’s Instant Booking initiative and Khosrowshahi, speaking during Expedia’s third quarter earnings call, indicated that there are no prospects for a change in that position.
Khosrowshahi said he didn’t think it was in Expedia Inc.’s long-term strategic interest to become a TripAdvisor Instant Booking partner, which would have meant that Expedia would provide fulfillment for bookings processed on TripAdvisor.com or in TripAdvisor apps in exchange for a revenue-share arrangement. And such a relationship wouldn’t have been profitable enough in the short-term to make it worthwhile, he said.
Expedia, which spun off TripAdvisor in 2011 and acquired Germany-based metasearch site Trivago in 2013, isn’t panicking about a reduction in the clicks it gets from TripAdvisor, though.
“While TripAdvisor is a our largest metasearch partner overall, Trivago continues to gain share and deliver more clicks to brand Expedia than TripAdvisor did in the third quarter,” Khosrowshahi said.
A Click is Not Just a Click
Expedia Inc. is investing in Trivago’s growth — as is Trivago itself — and the hotel metasearch company now has sites in 49 countries, with strong growth coming in North America and Latin America, for example.
But in this marketing relationship between online travel agencies and metsasearch sites, a consumer referral that Expedia gets from Trivago isn’t necessarily the same as a lead that Expedia receives from TripAdvisor, Khosrowshahi said.
That’s because Trivago tends to be strong in domestic markets while TripAdvisor attracts a larger mix of international travelers, he said.
Trivago will be “a nice growth driver for us for the next couple of years,” Khosrowshahi said.
And Then There’s Google
While Expedia’s relative positions and marketing clout in TripAdvisor and Trivago are changing, Khosrowshahi is optimistic about Expedia’s ability to attract customers from Google Hotel Finder, which is producing more traffic for Expedia than in the past, and through certain retargeting efforts that Google is carrying out.
Expedia has shown over the years that it can get its “fair share” of traffic through Google whether it is through Google’s AdWords, search engine optimization, or now Google Hotel Finder, Khosrowshahi said.
“We are happy to play in any market that Google puts out there,” Khosrowshahi said.
Expedia was an active participant in a coalition several years ago that tried to block Google’s acquisition of flight-shopping engine ITA Software, but that crisis is over and it sounds as though Expedia is playing very nicely with Google now.
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Photo credit: Expedia CEO Dara Khosrowshahi speaking at the PhoCusWright Conference in 2012. George Grinsted / Flickr.com