While well-known travel companies, including Booking Holdings, TripAdvisor, Grab and Meituan, are betting big on the synergies between travel and restaurants, and in some cases, food delivery, Expedia Group CEO Mark Okerstrom isn’t ready to endorse the trend.
Pointing to Booking Holdings $941 million writedown in 2016 on its $2.6 billion acquisition of OpenTable a couple of years earlier, Okerstrom said there is a “real question” as to whether the synergies between travel booking, restaurants, and ridesharing are real.
The issue of servicing locals going out to restaurants or buying concert tickets versus travelers coming into town very occasionally is one that many travel companies have tried to address in recent years.
The travel industry has learned from Booking Holdings’ difficulties with OpenTable that it is wise to be careful when considering investing in the connection between food and travel, he said.
In addition to the writedown, Booking Holdings recently reorganized its OpenTable dining reservations unit, transforming it from an independent brand and folding it into Kayak’s purview. Kayak CEO Steve Hafner has overall responsibility for OpenTable, and OpenTable CEO Christa Quarles is leaving the company.
Back to Basics
Okerstrom said Expedia Group is focusing on the basics of travel rather than experimenting deeply with adjacent verticals.
Still, although Expedia Group hasn’t acquired a restaurant reservations platform, as did Booking Holdings with OpenTable, and TripAdvisor, which bought La Fourchette, Expedia did announce earlier this year that it signed up Reserve as the exclusive dining reservations platform on Expedia.com. That partnership never came to fruition, and in the interim Resy bought a struggling Reserve.
In fact, what happened is that Expedia, in test and learn mode, decided not to go ahead with an ongoing Reserve implementation, and decided to grow its Expedia Local Expert business instead.
Expedia does offer some dining services, although in a low-key way. Expedia.com, for example, offers a plethora of foodie and wine-tasting tours, and concierges from the Expedia Local Expert business indeed can make dining reservations for travelers. Most of the Expedia Local Expert service takes place online, although there are a handful of touristy destinations that have physical concierge desks.
As with restaurant reservations, Okerstrom doesn’t believe that Expedia needs to make big investments in ridesharing or food delivery, as Booking Holdings has done with Didi in China and Grab in Southeast Asia. TripAdvisor has partnered with several food delivery services.
Okerstrom, who was speaking at a press briefing at the company’s Explore ’18 conference in Las Vegas last week, pointed out that his company doesn’t need to make big investments in ridehailing because of its relationship with Uber.
Uber CEO Dara Khosrowshahi was Okerstrom’s immediate predecessor as CEO, and he still has a seat on the Expedia Group board. Okerstrom said Expedia’s business travel unit, Egencia, currently offers business travelers Uber rides.
Asked about the synergy that Chinese e-commerce platform Meituan is finding between food delivery services and hotel bookings as it becomes one of the leading accommodations-booking sites in China, Okerstrom said one needs to set China aside as a potential example for companies in other geographies.
“China is a different world,” he said.
He’s also apparently setting aside big investments in restaurants, food delivery and ridesharing for now while Expedia focuses on the basics — or until it finds an opportunity for an attractive deal.