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Expedia Inc. intends to make a play in tours and activities — but not through acquisitions.
In its bid to remain “focused on what we’re doing now,” as CEO Dara Khosrowshahi put it in yesterday’s third quarter earnings call, you shouldn’t expect Expedia to go the acquisition route as TripAdvisor did with its acquisition of Viator and the Priceline Group did by snatching OpenTable.
Instead, Expedia, seeing a new opportunity in tours and activities with the proliferation of mobile devices, intends to build up its existing Expedia Local Expert business, which staffs concierge desks in tourist locations in Hawaii, Orlando, Mexico, the Caribbean, Las Vegas and New York. Expedia.com has a “things to do” homepage tab, as well.
Expedia CFO Mark Okerstrom variously characterized the company’s existing tours and activities business as “a decent-sized business” and “a large business.”
“And I would just add that with respect to tourist attractions, we’ve actually got a decent-sized business, we call it our Local Expert Business,” Okerstrom said. “It’s a large business. It’s something that we’ll be increasingly focusing on.
“And it’s something we think, that mobile creates specific opportunity on,” Okerstrom said. “So I think you might hear more about that business in the coming years. It’s something that we’ve got already in-house and it’s something we can build nicely organically.”
Organic Growth and A Focus on Core Businesses
In other words, don’t expect Expedia to make the kind of big mergers and acquisitions splash in tours and activities that TripAdvisor and the Priceline Group did, albeit in restaurant reservations for the latter.
Khosrowshahi, though, sees Expedia Inc. staying focused on its core businesses, presumably hotels and flights for the most part.
During the question and answer session of the third quarter earnings call, Michael Olson of Piper Jaffray asked:
“And then, I get the sense that you guys believe there’s enough fish to fry in the core travel market without really expanding into a lot of other peripheral areas, like tourist attractions or restaurants, etc. Is that true? Or how would you describe how narrow or broad your focus is?”
Khosrowshahi replied: “Yes. Listen, this is a trillion-dollar global marketplace. And Mark and I are never bored, as is anyone here. We’ve got plenty to do. We think, as a company, we’re executing better, but we think we can execute much better going forward. And we think, as a result, staying focused on what we’re doing now is going to give us plenty of opportunity and it’s going to keep us pretty darn busy.”
If tours and activities provider GetYourGuide is looking for an exit strategy over the next couple of years, and if it was aiming to get acquired by one of the major online travel agencies, it looks as though Okerstrom’s statement on Expedia’s plan to grow tours and activities organically leaves GetYourGuide with just one potential acquirer — the Priceline Group.
That’s because Expedia has sort of ruled itself out and TripAdvisor chose to acquire Viator over GetYourGuide perhaps because Viator is a larger business, and might have come at a cheaper price tag than the ambitious GetYourGuide.
Until recently, TripAdvisor had been using both Viator and GetYourGuide for tours and activities, but dropped GetYourGuide in the months following the acquisition of Viator.
GetYourGuide isn’t in any hurry, though, as it raised $25 million in a Series B funding round in July, bringing its total funding to $45.5 million.
Asked about GetYourGuide’s prospects, Johannes Reck, GetYourGuide’s CEO and co-founder said: “I cannot comment on TripAdvisor’s, Expedia’s or Priceline’s behalf. As for GetYourGuide: We are laser focussed on growing our business.
“Our growth rates since the TripAdvisor-Viator deal have not slowed down, in fact the team has shown an amazing response and worked harder than ever before. We regained the loss of traffic from TripAdvisor in less than 40 days by growing alternative channels. Our company is clearly not for sale at this point and we focus on building a valuable business at scale.”