Excuse the cliché to come, but whether travel is about the journey or the destination, it does pay to at least have some rough idea about where you want to go long-term.
And that’s where Expedia – and, indeed, the larger travel industry – comes in.
In case you haven’t heard by now, here’s the skinny: Expedia CEO Mark Okerstrom and CFO Alan Pickerill have resigned following a conflict over the company’s strategy, the company said in a press release on Wednesday (Dec. 4). Barry Diller, chairman of the board, and Peter Kern, vice chairman and director, will oversee the company’s executive leadership team. Eric Hart, chief strategy officer, will serve as acting CFO. The role of Ariane Gorin, president of Expedia Partner Solutions, will expand into president of Expedia Business Services.
According to Expedia and reports, the issue came down to direction and strategy in the quickly changing – and ever more digital and mobile – travel industry, which is undergoing serious disruption that promises to get even more intense in the new year and decade. As the Financial Times summed it up, “the company’s preoccupation with simplifying its portfolio, which includes Hotels.com and Trivago, and attracting new customers has compounded broader challenges for the industry as it grapples with competition from the likes of Airbnb and Google.”
As PYMNTS has reported, in fact, Google continues to make serious strides in the travel industry – strides that are revealing how much influence the search engine giant has on an industry worth an estimated $8.8 trillion or more annually when measuring its impact on the global economy.
Google is not the only big or emerging player in travel, but its recent moves perhaps help to illustrate some of the trends Expedia is trying to follow. Earlier this year, for instance, Google launched a product that will make it easier for users to plan and organize their travel plans, including the integration of flight and hotel search functions. While the offerings were released on smartphones last year, they are now also available on desktops at google.com/travel.
“It often takes days or weeks to plan a trip. When you need to pick up planning again, we’ll keep track of your trip research across Google. Recent searches, saved places and flights you’re tracking are added automatically to your trips when you’re signed into your Google account,” wrote Richard Holden, VP of product management and travel at Google, in a blog post. “Soon, we’ll add viewed things to do and saved and viewed hotels to your trips. When you want to continue planning, all of your research will be waiting for you at google.com/travel. If you don’t want to see private results, you can opt out by adjusting your results, and web and app activity settings.”
Indeed, more data from Google bolsters such statements and points toward the future of travel in the 2020s. As of the end of 2018, for instance, Google research found that 36 percent of international travelers “would likely pay more for services if a travel brand tailored its information and trip experiences to personal preferences or past behavior.” Not only that, but 57 percent of “U.S. travelers feel that brands should tailor their information based on personal preferences or past behaviors.”
Google, of course, isn’t the only game in town, but analysts point to a growing trend of more consumers turning to the search engine for their travel needs, either partially or in full. Several analytical views of the travel space have indicated that travel, in the words of one such report, accounts for some “15 percent of Google's overall revenue, and that its pieces would be worth $100 billion as a standalone business – more than (some) competitors.”
Beyond that, one of the biggest challenges is the tendency of many adventure (and luxury) travelers to share their adventures as part of a group. More and more consumers are getting used to doing P2P payments — one way to split tabs — but travel experiences are a much different beast than are group dinners in restaurants. And the travel industry is still working to catch up with those changing consumer desires.
“More and more, OTAs [online travel agencies] are moving into that group opportunity,” said Colin Smyth, head of travel at Flywire, in a PYMNTS interview. “Consumers and guests are looking for seamless payments.”
He mentioned Uber as the ideal example and trend-setter for seamless payments. He also said travel operators and OTAs — both of them vying for more control of travel consumers and the revenue they produce — have to get creative with payment methods and options, even if that means just offering installment plans.
For OTAs and tour operators, taking payment up front is one thing. Disbursing 70 percent to 80 percent of those funds to multiple entities over time in different currencies is entirely another.
Disruption in the complicated, varied travel industry is widespread, which is one of the challenges Expedia faces as it seeks to regroup and revive itself. The (digital) pages of PYMNTS provide solid testimony to that fact.
Indeed, a group of startups is setting its sights on the travel activities industry, which is the fastest-growing segment in the tourism market. The startups are targeting millennials around the world, offering services such as amusement park tickets, cooking classes, walking tours and more, focusing mainly on the growing Asian travel market. In fact, travel industry research company Phocuswright has predicted that turnover in the tours and activities market would reach $120 billion this year, with more than a third spent with Asian suppliers.
“Asian inter-regional demand itself is as sizeable as the U.S. or Europe, then you add on the growth,” noted Eric Gnock Fah, co-founder of Klook, according to the Financial Times. “In five years’ time, I think Asia as a whole will be bigger than the U.S. and Europe. That’s why I think investors in general are optimistic about this sector.”
Founded in 2014, Klook received a $225 million cash investment from SoftBank earlier this month, bringing its total raise to $520 million and its valuation to over $1 billion. The company currently offers more than 100,000 activities in over 270 cities.
Sharing Economy Changes
The so-called sharing economy, too, is playing a big role in travel, and shows every sign of continuing to do so, even amid recent concerns about security and fraud, as well as push back among some governments against the spread of vacation rental properties. Airbnb is the big player in this area, and the company is seeking to add more variety to its offering in hopes of not only attracting new customers, but also retaining those who might need various types of travel services.
One example of that?
The online hospitality platform is now making those offerings easier to find through new search capabilities for work trips. The move comes as more businesses turn to Airbnb for Work to put together business trips, according to reports. Through Airbnb’s work trip toggle, users can personalize their search results for business travel while filtering out vacation homes and less convenient offerings. The platform relies partially on social recommendations to ensure that Airbnb Plus homes, entire homes and boutique hotels – as well as properties with positive ratings from corporate travelers – are shown.
Not only that, but the platform recently unveiled its Luxe offering to bolster its luxury travel efforts. The home-sharing company sends out inspectors to determine whether homes meet criteria such as high-quality furniture and chef-grade appliances. Such efforts could help the company fend off increasingly aggressive competitors — to say nothing of taking more business away from the likes of Expedia.
Travel and tourism continue to grow – some 3.9 percent or so, according to various estimates. But the industry is still ripe for disruption and massive changes – and the possibility of failure always awaits.