Expedia Group's brand strategy makes sense to the extent that these three core brands don't detract from the company's global ambitions.
Dennis' Online Travel Briefing
Editor’s Note: Every Wednesday, Executive Editor and online travel rockstar Dennis Schaal will bring readers exclusive reporting and insight into the business of online travel and digital booking, and how this sector has an impact across the travel industry.
Expedia Group has 10 consumer brands, but its marketing strategy shifted starting in late 2021 to emphasize three core brands above all others: Expedia, Hotels.com and Vrbo.
That’s one of several interesting takeaways from Expedia Group’s 2022 10-K financial report, which was published Friday.
It’s Expedia, Hotels.com, Vrbo … and the Seldom Mentioned
Expedia Group considers Expedia the full-service travel brand as it offers stays, flights, car rentals, packages, things to do, and cruises.
The company looks at Hotels.com as the singly focused lodging marketer with its hotels, homes, apartments, villas, and hostels.
Vrbo is the whole homes vacation rental brand.
In addition to their main U.S. market, these three brands have localized websites around the world, although most of Expedia Group’s revenue in 2022 came from the U.S. (See more below.)
In the financial filing, Expedia Group stated: “While we maintain a large portfolio of consumer brands, we put the majority of our marketing efforts towards our three core consumer brands: Expedia, Hotels.com, and Vrbo.”
That’s a shift from the company’s 2021 10-K, which cites the Group’s “extensive portfolio of consumer brands.”
The other still-running but now de-emphasized consumer brands include Orbitz, Travelocity, Wotif Group, ebookers, CheapTickets, Hotwire.com, and CarRentals.com.
In 2018, Skift did an explainer on Expedia Group’s then far-flung 23 brands, including consumer and business-to-business brands. The company has shed several of those brands since Peter Kern became CEO in 2020, namely Egencia, SilverRail, Classic Vacations, Alice, and others.
Under the prior Expedia Group leadership of Dara Khosrowshahi and Mark Okerstrom, many of Expedia Group’s consumer brands had their own marketing teams that sometimes competed against one another, but under Kern the marketing employees now work in unison, or at least that’s the way officials tell it.
The idea is that focusing on the three core consumer brands would reap greater results than a more scattershot approach.
So witness the fact that Vrbo made a return appearance with a Super Bowl spot on Sunday, iSpot.tv estimated that Expedia.com was the third-highest advertising spender on U.S. national TV during the first 11 months of 2022, and Hotels.com kicked off a new ad campaign, Find Your Perfect Somewhere last year, and refreshed it in January.
In video and TV formats, at least, Orbitz and Hotwire haven’t debuted new spots since 2021.
It will be interesting to see how the emphasis on Expedia, Hotels.com and Vrbo and the playing down of the Orbitz brand will mesh with Expedia Group’s pending launch of a consolidated loyalty program, One Key, which was to combine the Expedia, Hotels.com and Orbitz loyalty programs into one plan, and expand it to Vrbo, as well.
Why hype Orbitz’s inclusion into the new loyalty program when the company won’t be marketing Orbitz as a core brand?
Vrbo Didn’t Boost Its Property Numbers in 2022
Expedia Group reported that it added 25,000 hotels to its stockpile of lodging offerings in 2022, bringing its total count of accommodations to 3 million available, but Vrbo’s contribution remained relatively stagnant at “over 2 million online bookable alternative accommodations listings.”
For 2021, Expedia Group likewise reported roughly 3 million properties available, with more than 2 million of them being alternative accommodations.
Asked about Vrbo’s seeming lack of expansion in its property numbers, an Expedia Group spokesperson stated: “Vrbo is focused on quality, not the quantity of places for travelers to stay together. It’s more important to us that families and groups of friends have the best selection of private, whole home accommodation in the most popular vacation destinations with great amenities. Last year, Vrbo experienced the highest ever property adds in the U.S. and has superior inventory in beach and resort markets.”
It’s unclear whether a Vrbo technology migration into the Expedia brand platform’s front end that started in 2022 played any role in its property numbers. That transition that will continue well into 2023.
Meanwhile, Airbnb stated Tuesday night that its current 6.6 million global active listings amount to 900,000 more than what it had at the beginning of 2022 when excluding the listings it had in China before dropping out of that domestic market.
Incidentally, Expedia Group has been working on a wide assortment of tech platform migrations off and on for way more than a decade. You can look at that several ways: Either the company should be lauded for constantly seeking to improve its technology and efficiencies, sometimes in the wake of acquisitions, or perhaps some of these earlier protracted efforts just didn’t stick.
Expedia Got More Global in 2022
Expedia Group took in 66 percent of its revenue from the U.S. in 2022 and 34 percent from the rest of the world, which was another takeaway from its annual financial filing.
In contrast, in 2021, when Europe was still facing Covid-related shutdowns for part of the year, Expedia Group derived more of its revenue from the U.S., namely 76 percent. That meant only 24 percent came from beyond U.S. borders.
In pre-Covid 2019, when international borders, including China, were passable, Expedia Group’s revenue split was 56 percent U.S. versus 44 percent international.
So Expedia Group was considerably more of a global company in 2019 than it is today. China’s expected reopening in 2023 should help Expedia Group a tad with international expansion. The company has a partnership with Trip.com Group on outbound China travel, but that’s not a significant portion of Expedia Group’s business.
versus loyalty consolidation
Tags: advertising, airbnb, alice, brands, brands explained, carrentals.com, cheaptickets, Dennis' Online Travel Briefing, ebookers, egencia, expedia, expedia group, future of lodging, hotels, hotels.com, hotwire, marketing, online travel newsletter, orbitz, short-term rentals, silverrail, Skift Pro Columns, travel tech, travelocity, vacation rentals, vrbo, wotif