For the first time, Expedia Group hinted Thursday at how well its tours and activities business is performing.
During a first-quarter 2018 earnings call, CEO Mark Okerstrom said the company generated “north of half-a-billion dollars in bookings” in full-year 2017 across its Things to Do and Local Expert businesses — a figure later confirmed by company spokesperson Sarah Gavin.
Okerstrom also said that in the first quarter of 2018 Expedia grew its activities transactions by approximately 20 percent.
The mention was notable because the online travel giant has been generally tight-lipped about its activities sales.
Okerstrom may have felt prompted to reveal more than usual after the news last week that its arch-rival Booking Holdings had acquired FareHarbor, a seller of software to activities operators — and after activities market leader TripAdvisor acquired a similar company, Bokun, the next day.
Okerstrom said of Expedia Group: “We are interested in stepping up our efforts.” He said that the company was “looking at” more actively upselling customers who had already booked a flight or hotel on Expedia with an activity.”
The company is also looking at making offers to guests while they are in a destination, via Expedia’s mobile app.
Expedia’s Local Expert unit deploys many teams within destinations to offer on-the-spot activity sales. Strictly speaking, these are “offline” sales, equivalent to a call center, but they still contribute to Expedia’s overall activities bookings.
The half-billion-dollar gross bookings figure is in line with Skift Research estimates that TripAdvisor is the market leading consumer marketplace for activities at roughly four times the size of Expedia by inventory. Consumer-facing startups like GetYourGuide and Klook appear to be gaining traction fast.
As context, FareHarbor, the business-to-business company that Booking Holdings snapped up, said it is on track to process more than $1 billion transactions in 2018. It’s unclear how much of that inventory might find its way onto websites like Booking.com once brands like that start wooing users of Fareharbor’s software to upload their inventory for distribution via Booking Holdings brands.
Expedia Group’s half-billion dollar figure is also chump change in the grand scheme of things, at less than 1 percent of Expedia’s gross bookings and sales. It’s a useful reminder of how early the market is, despite travel corporation enthusiasm for the tours and activities space.
Will Expedia respond to TripAdvisor’s and Booking Holdings’ recent acquisition activity?
Okerstrom said: “We feel good about our organic positioning, but, you know, there are always M&A [merger and acquisition] opportunities out there. We will be very disciplined in looking at those and we will be opportunistic.”
Expedia’s decision can’t be made in a vaccuum. Other players, such as Ctrip and Alibaba’s Fliggy, may also be eyeing moves, and so might non-traditional players, like Airbnb and Hotelbeds.
For example, in November 2017, Ctrip.com signed a partnership with Big Bus Tours, which operates open-top sightseeing tours in 19 cities worldwide — revealing the Chinese travel agency giant’s interest in the sector.