Expedia’s Shuttering of Another Brand Points to a Clash of Online Travel Strategies

Online Travel This Week

Expedia Group closed its offline Expedia Local Expert business, which for years had agents sitting at desks in destinations such as Honolulu and Orlando hawking tours and activities, as well as ground transportation.

In breaking the news of Expedia shuttering its brick and mortar tours and activities’ business, Arival noted that the offline component had likely had been responsible for about half of Expedia’s experiences business, pegged in 2018 at more than $500 million in sales, and that the online “things to do” feature will stay operational.

“While we remain committed to the activities sector and will continue to offer activities for purchase online, as these experiences enrich and add value to any customer trip, this move, while difficult, is a necessary one,” Expedia told Skift Wednesday.

Covid-19 and the subsequent collapse of tourism in destinations such as Hawaii and Florida contributed to the demise of Expedia Local Expert, but the closure is also part of Expedia Group’s year-long effort to cut the bloat, and streamline the far-flung offerings of what the company boastfully calls “the world’s travel platform.”

In part of CEO Peter Kern’s drive to restructure Expedia Group and the way it operates, the company this year has shut Expedia Group Multifamily solutions, which was a short-term rental solution for landlords in large buildings, handed SilverRail back to its management, and now folded up the Expedia Local Expert concierge service, among other moves.

The series of brand trims highlights the divergent moves and of online travel’s biggest players. While Expedia Group looks to put more focus on its most important businesses and to simplify, Airbnb is on a path that has rough parallels to Expedia’s.

Although it had a much less-complicated business than Expedia has, at the onset of the pandemic Airbnb reduced its investments in its hotel business and Airbnb Luxe, abandoned Airbnb Plus, and postponed moves to expand into flights and Airbnb Studios.

There is some sense that Airbnb has scaled back its earlier ambitions to become a more wide-ranging online travel agency, although it remains to be seen whether the pause will be lifted when there is a full-fledged travel recovery.

After all, in the long-term, if governments around the world increasingly regulate Airbnb and other short-term rental platforms, then the growth will have to come from somewhere else. Asked at the recent Skift Short-Term Rental and Outdoor Summit whether Airbnb would need to go more mainstream in its product offerings, Chip Conley, an Airbnb strategic advisor, said “The company is a strong enough brand that there have been ways for us to expand the brand and expand the revenue.”

He added: “There are plenty of opportunities for Airbnb to remain unique but grow mainstream.”

Meanwhile, Booking.com, which grew into a household name in Europe largely because of its focused hotel business, has been expanding into alternative accommodations, tours and activities, ground transportation, payments, and flights.

AirAsia is another travel company getting way more expansive, branching into holiday packages, retail products, and financial services.

So which wins? Focusing on your core business or branching out into others? It’s a fine line that many companies try to walk. Concentrating on a core business certainly is a winning formula, but at some point public companies have to generate growth elsewhere in a what have you done for me lately scenario. That’s the conundrum.

Google CEO Sundar Pichai’s Curious Spin on Acquisitions

Faced with three antitrust lawsuits, including one from the U.S. Department of Justice, as well as the European Union’s proposed Digital Markets Act, Google CEO Sundar Pichai had a curious take in a Financial Times interview Wednesday on Google’s motives in making acquisitions.

Pichai argued that Google doesn’t make acquisitions to dominate a market. “We only want to do acquisitions where we are able to add to innovation,” or otherwise benefit users, he told the Financial Times. “We’ve had that framework for a long time.”

The context is that there have been increasing calls for big tech platforms to unwind some of their biggest acquisitions, a process that would be fraught with legal complications.

In thinking about some of Google’s travel acquisitions over the years, it’s clear Google had innovation in mind when it made its landmark 2011 acquisition of ITA Software, which became the foundation of Google Flights. In so doing, Google also wanted to become a major player in flights, and it has indeed become one.

But Google hardly had innovation in mind — indeed motives included market dominance and benefitting users — when it acquired Zagat in 2011 and then bought Frommer’s the following year to go after Tripadvisor, Yelp, OpenTable, and others. For example, Zagat for many years had been a print-only restaurant guide so it was hardly a bastion of innovation.

Google therefore isn’t entirely pure and or may not be primarily interested in innovation when mulling mergers and acquisitions. Google, it goes without saying, is clearly a very innovative company, however.

But don’t companies acquire other companies every day with the idea of taking out competitors and gaining market share? That’s why there are regulatory processes in place — to ensure that mergers don’t stifle competition.

As in the aborted U.S. Federal Trade Commission probe of Google in 2013, clearly some regulatory bodies haven’t been meeting their obligations.

Note: Dennis’ Online Travel Briefing will take a holiday break and return January 6.