Expedia Bolsters Its Promise to Streamline by Sharpening Use of Data

Expedia Group historically had a ton of customer data to hone operations but the data were siloed, making the company “a blunter instrument” and less-focused than it would have liked.

That’s how vice chairman and CEO Peter Kern on Wednesday described Expedia’s efforts to turn 17 data feeds into one so the company can get more granularity into its customers’ behavior and the company’s geographic performance. Expedia has also combined its various brand marketing teams for efficiencies and with the hope they won’t end up competing against each other.

Expedia lists 19 brands from Expedia to Hotels.com and Traveldoo on its investor relations site.

In addition to becoming more efficient — the company has targeted close to $1 billion in variable cost and other annual run rate reductions — the enhanced data insights are helping Expedia Group rationalize and segment its far-flung brands, Kern said.

Vrbo Continues to Be on a Roll

Speaking during the company’s third quarter analyst call, Kern said the company may decide to emphasize vacation rentals through Expedia instead of its dedicated whole-home brand Vrbo in markets where Vrbo isn’t well-known. However, he acknowledged that consumers don’t generally visit the Expedia brand looking for vacation rentals where discoverability and the product itself needs improvements.

Kern offered this background to highlight Expedia Group’s third quarter, in which he cited Vrbo’s half-year surge in vacation rentals compared with Expedia’s hotels’ business. Expedia, which is strongest in the United States, benefitted from North America performing better than Europe, where new Covid-19 impacts have been more severe, he said.

In the third quarter, Expedia Group’s booked room nights declined 58 percent compared with a year earlier, but that was an improvement from the June quarter, when room nights were off 81 percent.

Despite the room night drop, and weakness in hotels, Vrbo saw its bookings increase year over year, and Kern said there is an opportunity to market Vrbo more heavily in markets where it isn’t well-known.

Vrbo will benefit from the fact that during the pandemic it has been introduced to a new set of customers who hadn’t considered vacation rentals, which are Vrbo’s specialty. Kern argued that Vrbo’s whole-home emphasis positions it well against Airbnb, although Vrbo needs to get more urban to compete more effectively against Airbnb and Booking.com.

He said Expedia wants to be more bold during these challenging times in its marketing of Vrbo — especially after botching the rebrand of Homeaway/VRBO to Vrbo (pronounced “verbo”) a couple of years ago. “We will continue to be pushing for that,” Kern said, referring for more aggressive marketing.

The company notched a net loss of $221 million in the second quarter compared with net income of $409 million a year earlier when a pandemic of this magnitude was almost unthinkable. Revenue in the third quarter declined 58 percent to $1.5 billion.

Taking Advantage

Both Kern and Chief Financial Officer emphasized that Expedia is positioning itself to be more efficient by reducing fixed and variable costs and making margin improvements, and to improve things such as its business to business efforts while travel volumes are low because of the pandemic.

Said Kern: “We do believe that people have been up, until this recent wave, getting increasingly comfortable with the idea of traveling. This will obviously have an impact recently, but it will remain bumpy and unpredictable. And we can’t control that.”