Expedia is content to work with Google on hotel bookings while stiff-arming TripAdvisor. There is likely more to the warming and cooling relationships than just the relative economics.
Expedia Inc. is cozying up to Google to enable Expedia hotel bookings right in the search engine but Expedia is keeping its distance from hotel bookings on former sister site TripAdvisor.
Speaking during Expedia’s second quarter earnings call July 30, CEO Dara Khosrowshahi said the company plans to test Book on Google, which enables consumers to book hotels through partners in Google search and maps, and on Google+ but Expedia doesn’t have plans to do likewise with TripAdvisor’s program, Instant Booking.
Comparing TripAdvisor Instant Booking with Book on Google, Khosrowshahi said: “One difference we see with the Google treatment of the bookings is that the Google treatment tends to be much more clear that the booking is actually with the OTA (Online Travel Agency) and Google is not the merchant etc. It is really making the payment process easier rather than trying to own the customer one way or the other.”
You can indeed make the argument, as Khosrowshahi did, that Google’s verbiage about which company is handling the booking is more straightforward than TripAdvisor’s.
Google states specifically: “You are booking with Hudson New York on Google,” for example. There’s nothing ambivalent about the way Google phrases it.
Here’s Google’s “treatment,” as Khosrowshahi put it:
TripAdvisor’s verbiage is more open to interpretation, stating: “AccorHotels.com will provide customer service for this reservation” and “TripAdvisor has partnered with AccorHotels.com to bring you this deal.”
That might not necessarily provide the consumer with the understanding that AccorHotels.com is actually performing the booking on TripAdvisor.
Khosrowshahi said Expedia will test enabling its hotel bookings on Google and will evaluate the process from financial and customer-satisfaction perspectives.
Khosrowshahi explained that Expedia participates as an advertiser in TripAdvisor’s hotel metasearch feature but has access to less of the addressable market because TripAdvisor is partnering with so many hotels to enable bookings on TripAdvisor without users having to navigate to hotel or online travel agency websites.
That’s nothing new, he said, adding that Expedia has been able to handle the changes in the TripAdvisor platform and Expedia’s business with TripAdvisor is actually growing despite its absence from TripAdvisor Instant Booking.
Having Expedia or Booking.com as partners for Book on Google would be a big advantage for Google over TripAdvisor in terms of comprehensiveness.
Expedia’s absence from TripAdvisor Instant Booking likely has a lot to do with the economics of partnering with Google versus TripAdvisor but none of this is set in stone. Expedia could ultimately decide to partner or not with Google on bookings, and one day might find itself as a TripAdvisor booking partner if the conditions — or concessions — were advantageous.
Hotels are Booming on Expedia Inc. Sites
In other news, Expedia saw its global hotel room nights sold jump a whopping 35 percent in the second quarter to 50.6 million versus the second quarter of 2014.
What was described as “organic” growth from Travelocity, acquired earlier this year, and the Expedia Affiliate Network, as well as “inorganic” growth from Australia’s Wotif, acquired in 2014, and the Air Asia/Expedia joint venture, drove the boost to global room night growth. Expedia increased its stake in its joint venture with Air Asia to 75 percent in February 2015.
Asked by a financial analyst whether he was satisfied with the breadth Expedia’s portfolio or was there an appetite for more acquisitions, Khosrowshahi said: “Hi, I think for the time being, we’ve got plenty on our plates. We are going to be opportunistic and I’d say especially outside the U.S., we think we have potential.
“We want our revenue outside the U.S. to be bigger than our revenue in the U.S. So I think to the extent we look for partnerships or acquisitions, it would tend to be outside the U.S. and we think we certainly have our plates full here and we have plenty of work ahead of us for the next couple of months.”
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Photo credit: Google plans to enable hotel bookings right in Google Maps, Google search and Google+ and Expedia will test being a partner for these Book on Google hotel bookings. Google