Expedia shifts its focus to Asia

Technological disruption has led to shake-ups across a wide variety of industries, causing some companies to boom and others to fade. Today, in the third of a five-part series on such disruptors, The Straits Times looks at online travel company Expedia.

Mr Greg Schulze says heavy investment in technology has been key to Expedia's success. The company invests over US$1 billion (S$1.4 billion) a year in technology.
Mr Greg Schulze says heavy investment in technology has been key to Expedia's success. The company invests over US$1 billion (S$1.4 billion) a year in technology. ST PHOTO: FELINE LIM

Online travel-booking company Expedia started 21 years ago with the idea that travel agents' computer screens should be turned around, and information should be provided directly to consumers.

It has since grown to become the world's largest online travel company, with about 200 other sites under its umbrella in 75 countries and US$81 billion (S$112 billion) in gross bookings for the year ending March 31.

Now, it has shifted its focus to Asia, said Expedia Group's senior vice-president for commercial strategy and services Greg Schulze.

With more than half of the world's millennials living in Asia, a younger demographic lends itself well to online travel as digital natives are comfortable transacting online, said Mr Schulze, 43, who is the first global leader from Expedia's headquarters in Washington to be based here .

And while traditional travel agencies focus on curated packages for group travel, "younger travellers want to travel on their own, they want to decide who to fly (with) and where to stay, which Expedia provides".

As more travellers make bookings online, figures from the Singapore Tourism Board show that the number of travel agencies that shuttered in 2015 was 119, the highest recorded in 10 years.

According to market research firm Euromonitor International, the Asia-Pacific is the fastest-growing region for online travel intermediaries - companies that connect businesses to customers.

But it is also a region where Expedia has yet to achieve a strong market share, Euromonitor said.

As Expedia's regional headquarters, the Singapore office at South Beach Tower has grown its staff numbers and invested more in technology, including the launch of an "innovation lab" in April to test products.

Mr Schulze said: "Singapore is a very fast-growing market for us... It's a strong market with high online adoption."

Heavy investment in technology is key to Expedia's success, he said.

"We're in travel, but we're a technology company and our edge is that we invest more than US$1 billion a year in technology. Of our 20,000 employees, we have 5,500 engineers and data scientists."

Leveraging its massive data base allows it to provide insights to consumers as well as travel partners, which include hotels, airlines, car rental companies and cruise lines.

Hotels, for example, are shown real-time booking information and reviews, which allow them to make pricing decisions and address customer-service issues.

About two-thirds of Expedia's first-quarter revenues came from hotel bookings, while airline bookings accounted for about 10 per cent.

The other sites owned by the group, including Trivago and Hotels.com, leverage some common functions but are encouraged to compete with each other, said Mr Schulze. One recent acquisition, vacation rental marketplace HomeAway, is positioned as a rival to home-sharing service Airbnb.

"Home booking is a very different and important addition to the travel space. HomeAway properties will eventually be integrated into Expedia's website," said Mr Schulze. "Our challenge is how to stay ahead with such rapid technological innovation. What comes next is really what keeps us up at night, what's the next disruption."

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A version of this article appeared in the print edition of The Straits Times on June 05, 2017, with the headline Expedia shifts its focus to Asia. Subscribe