Expedia puts Asia front and centre in global push

Singapore

ONLINE travel juggernaut Expedia Group plans to switch things up and push for its international operations, a big part of which also includes Asia, to grab the crown as the largest revenue earner and account for two thirds of the technology firm's topline "as soon as possible".

"About 45 per cent of our revenue today is outside of North America - Europe, Asia and Latin America, in that order. The goal is to try and make that closer to two-thirds over time," said Expedia Group president and chief executive Mark Okerstrom in an interview with The Business Times in Singapore, the regional headquarters for the group's flagship Brand Expedia.

"In fact, that (two-thirds) is the overall mix of travel in the world. Asia's a huge part of that... we need to have that representation in our bookings," he added.

As it stands now, the Nasdaq-listed travel firm's longest-standing market, North America, is in the driver's seat, where Expedia has a 13 per cent share (in terms of gross bookings) of a travel market that is estimated to be worth US$500 billion.

Overall, EMEA (Europe, the Middle East and Africa), the Asia-Pacific and Latin America make up just over 70 per cent of the US$1.7 trillion global travel market; the Asia-Pacific alone is reported to be worth US$500 billion.

That's a huge runway for growth. Expedia's international business enjoyed a compound annual growth rate of 17 per cent over the five years to 2018.

"Interestingly, Asia is growing significantly faster than all the other parts of the world, really. It's not just (about) China, Japan or India. It's exciting markets like Indonesia, Vietnam, Thailand...

"Our vision is to be the world's travel platform and we really can't do that effectively without winning here in Asia", said Mr Okerstrom, who only this month capped his second year as boss of the travel tech giant after he took over the top seat from Dara Khosrowshahi, now Uber's CEO, in August 2017.

In 2018, Expedia's gross bookings, a key metric that indicates total spend by customers on booking rooms, flights and other travel across its brands, grew 13 per cent to just under US$100 billion. Latest data from the group shows that more than 1 in 3 Expedia group transactions are booked via mobile globally with Asia leading this trend.

To coax more people to splurge on the group's online travel platform that covers everything from lodging and flights to cars, activities and cruises - or as he puts it: "We are everywhere" - and includes familiar brands such as Brand Expedia, Hotels.com and its corporate travel arm Egencia, Expedia has been deploying locally relevant content to drive its global agenda.

"One of the big themes for us over the last 20 months or so has been this concept of being locally relevant on a global basis. What that means is we can't be a company that sits in the US and projects ourselves all around the world and do everything the American way," he said.

The plan began with a "handful" of countries around the world and in the past six to 12 months, the firm has added a number of Asian countries to the effort.

One example is what Expedia has done in Japan - a sweet spot and key market where three years ago, Brand Expedia Japan hit the US$1 billion mark in gross bookings. There, Expedia has refined property details in the search results to include "Ryokans", a type of traditional Japanese inn much sought-after by Japanese travellers.

"We have to actually be relevant in the markets we operate in," he elaborated.

Nasdaq-listed Expedia which has a market capitalisation of nearly US$22 billion and last year earned US$900 million on the back of some US$11 billion revenue - a 33 per cent and 12 per cent jump respectively from a year ago - has 200 websites in 70 countries. Of these, 13 are Asian markets from Singapore and Malaysia to Indonesia, India, Hong Kong, South Korea, Japan and China.

The booking giant's extensive brand family also includes trivago, Vrbo (part of HomeAway and rival to Airbnb), Travelocity, CheapTickets and CarRentals.com.

Is the slowing global economy chiefly due to the US-China trade war dampening travel traffic or impeding its Asian goals?

"We are not seeing anything specifically in our bookings that we can put our fingers on (in terms of impact on travel). We are growing nicely and have had six quarters of strongest financial performance in a very long time," he replied.

Based on past events however, he added that when such events impact currency values, it could lead to a change in travel patterns. Or in the case of Hong Kong, a popular tourism spot that is currently suffering the brunt of prolonged protests punctuated by violence, "people just stop going there".

"We have seen that with some of the horrific terror attacks in France and Turkey too. The great thing about travel though is that it's resilient and people end up changing the places they go to but ultimately they still want to take that vacation or that business travel", he continued.

Mr Okerstrom added: "This (Asian expansion) isn't a two-year game, not a five or 10-year game. It's an infinite game. We are actually very happy with our progress in Asia today. We are exhilarated."