TripAdvisor Chairman on Relationship With Expedia: It's Complicated

Greg Maffei, the current chairman of TripAdvisor and a former chairman of Expedia, recently commented on the TripAdvisor-Expedia relationship, characterizing it as "coop-etition."

Maffei just did a stock swap of Liberty TripAdvisor shares with John Malone, chairman of Liberty Media, and the transaction left Maffei wielding voting control of TripAdvisor. Malone is the chairman of Liberty Media while Maffei is the CEO of Liberty Media and also is the chief executive of Liberty TripAdvisor Holdings, of which Malone is chairman.

So Maffei knows something about complexity, and likewise feels that the relationship between TripAdvisor and Expedia Inc., which spun off TripAdvisor in late 2011, is "complicated."

To say the least.

Complexities

Maffei answered a couple of questions at the Citi Global Internet, Media and Telecommunications conference last week about the TripAdvisor-Expedia relationship.

He prefaced those answers by noting that Liberty Media has several investments in competitors such as shopping retailers QVC and the Home Shopping Network so it shouldn't be a shock that Liberty Media is a major investor in both TripAdvisor and Expedia. In fact, if Expedia chairman Barry Diller, who currently controls Expedia Inc., should leave the company, Liberty Media would be calling the shots at Expedia.

“That having been said, the relationship between Expedia and TripAdvisor is increasingly complicated," Maffei told the audience at the Citi conference in Las Vegas. "It is a coop-etition."

"On some days," Maffei continue, "I’m sure Expedia would wish they didn’t have to pay for those cost per click leads from TripAdvisor. On other days they are pretty happy and they are bidding for those because that is an attractive business for them and they are making money on it."

Like online travel agencies from Booking.com and Priceline.com to Travelocity and Orbitz, Expedia is an active participant in marketing its hotel offerings through TripAdvisor' hotel metasearch product on a cost-per click basis.

Instant Booking

But as dependent as Expedia is on such marketing through TripAdvisor -- as is virtually everyone else -- Expedia has stopped short of acting as a partner in TripAdvisor Instant Booking, which enables users to book hotels right within TripAdvisor apps with an online travel agency processing the bookings and handling customer support in the background.

"So Instant Booking creates a new relationship, a broader relationship, but I think it’s a continuum of what’s already been there," Maffei said of the TripAdvisor-Expedia relationship now that TripAdvisor is making a big push for Instant Bookings and the increased conversions they bring. "There is coop-etition. As I said, some days it is appealing to Expedia and other days I suspect they may not wish it was so strong.”

For the record, nothing has changed recently in Expedia's boycott of TripAdvisor Instant Bookings. Expedia, though, hasn't ruled out participating in it at some point, but for now Expedia doesn't see it being in its interests to prop up TripAdvisor as a venue for travelers to complete their hotel bookings somewhat online travel agency-like.

As Maffei explains, the whole coop-etition between the two big travel companies is complicated.