Skift Take

What would make Expedia obsolete and cause Khosrowshahi to leave? Expedia's apparently outgoing CEO answered that question for us last year and talked about big technology trends a few years in the offing. But is he bolting because he thinks Expedia's best days are behind it?

There’s been a debate concerning Expedia CEO Dara Khosrowshahi’s apparent exit to become the Uber boss on whether he’s jumping to grab a remarkable opportunity or leaving a sinking ship.

Expedia’s financials have been somewhat shaky over the last year-and-a-half as it integrates its Orbitz Worldwide and HomeAway acquisitions, and perhaps Khosrowshahi feels that Uber is the future and Expedia is the past, goes this line of thinking. On the other hand, the global travel industry has tons of growth ahead, and as the number two player, behind the Priceline Group, Expedia is well-positioned.

But at Skift Global Forum in New York City on September 27, 2016, Skift founder and CEO Rafat Ali asked Khosrowshahi what would make him leave Expedia in five years, and the answer was about technology trends, not financials necessarily. [The question and answer start at 21 minutes in the video embedded below.]

Rafat Ali: In your opinion, what would make Expedia and Priceline obsolete? In five years, you are going to say, ‘I’m going to leave Expedia because I’ve done enough.’ What are you looking at that’s gonna say, ‘I’m going to kill Expedia, Priceline. This is the next big thing I want to do.’

Dara Khosrowshahi: I think we will be able to respond but I do think that…

Ali: That’s not the answer. I mean outside of Expedia…

Khosrowshahi: Listen, I think ‘obsolete,’ there is a drama to it. But I will tell you as we move over to more of a mobile device-centric world, we’ve all figured out apps etc… we’re really good at it. I think it is a really good thing for us. But I think the interaction model with devices is going to be much more voice-based.

And, we have trained over years and years and years with these wizards to tell someone: You have to put in a destination, you have to put in a date, and put in some other information. And people have been trained to do that, and it hasn’t changed for a long time.

When you go to a voice-based interaction, you can’t tell people: ‘Ask me this question and structure it in this way.’ And if they ask a question and you have a bad answer, first time, maybe they’ll be OK with it. Third time, they’re going to say this is a complete waste of time, I’m going away.

So I do think all of our booking paths, all of our databases, all of our data in general is structured in a very vertical way, based on queries that are structured queries, based on certain inputs. I think that those structured queries could go away. And you could get very, very unstructured queries: I want to go to New York next weekend, I want a direct flight, and I want two adjoining seats. And please get me a hotel in Midtown. What do I have available?

Based on the technology stack we have now, and based on how we’re constructed, we, and I think a lot of other travel companies, would have a very hard time answering that question. Even when Expedia has an advantage there because we’ve got everything and we are going to make everything available to them. But even we would have a tough time answering that question, and the vertical players certainly would have a really hard time answering that question unless it’s a specific… hotel question.

That then lends itself more to a Google query. And whether it’s Google who solves that question, or some other NLP [natural language processing] company or startup, I think that’s something that at this point we’re not well-armed for. But since you heard me answer the question, we’re definitely thinking about it.


Hardball Questions

Earlier in the interview [starting at 18:57 in the video] at the conference, Khosrowshahi was joking about my questions being too harsh, and quipped that he might not return in 2017.

Skift: TripAdvisor Instant Booking. You’ve been shut out…

Khosrowshahi: Where is the softball question here, Dennis? Jesus, I’m not coming back next year.

Skift: OK, I knew this might happen.

Khosrowshahi: C’mon, one softball question like … What’s your favorite place to travel? It’s an easy one.

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Tags: expedia, google, search, uber

Photo credit: Khosrowshahi being interviewed onstage at Skift Global Forum 2016 by Skift Executive Editor Dennis Schaal. Skift

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