Mark Okerstrom was promoted to CEO of Expedia after longtime chief Dara Khosrowshahi departed to head Uber Technologies. Okerstrom, the former CFO, takes over at a time when Expedia, No. 1 on the Travel Weekly Power List, is tasked with competing against No. 2 Priceline Group's Booking.com division as well as taking on hotel companies' efforts to lure more people to book direct. He spoke with hotels editor Danny KingQ: What's Expedia's biggest challenge, and how might you approach it differently than your predecessor?
A: Our biggest opportunity is expanding our presence internationally. We will be more focused on being more locally relevant from a supply, translation and payment standpoint, and making sure we're offering truly local products. That's not to say that wasn't the plan under Dara, but we hope we can accelerate that and perhaps be more focused on operations and less on [mergers and acquisitions], where I've been focused during the past five years.
Q: With recent initiatives such as your Thomas Cook partnership and the Expedia Powered Technology suite of services, do you see the company becoming more of a technology provider than a distribution partner?
A: We've got so much rich data, and our technological capabilities are pretty unrivaled. Things like revenue-management tools that allow our partners to price more intelligently, or our majority investment in [operations-software maker] Alice, which helps hotels better manage back-office operations. You're going to see us trying to create more value for our partners.
Q: How does Expedia take better advantage of the growing peer-to-peer lodging market largely spurred by Airbnb?
A: When we [bought HomeAway], it was estimated that $14 billion to $16 billion of business was happening, and a tiny fraction of that was online, so the first priority was getting more of what they already had online. Also, HomeAway has been largely a second-home marketplace and more skewed toward resort and ski, so there's an opportunity to go much more into the urban space. Our next step is integrating [HomeAway's] 60,000 properties across Expedia's 11 brands.
Q: Are you concerned with hotel companies' efforts to spur people to book direct and away from intermediaries?
A: I don't begrudge anyone trying to get more of their traffic direct. It's business-smart, but I do disagree with the tactic -- it could be nuanced better. But our customers are brand-agnostic. That's why they're on our site. So we think we provide an invaluable instrument for independent hotels to enter the marketplace, compete with peer hotels and get bookings they wouldn't otherwise get.
Q: Why did the recent negotiations between Expedia and Hyatt appear to be so contentious?
A: We have been on a journey for the last four years to restructure our hotel [booking] margins. We used to have largely a premium-price structure for everyone. Now we've transitioned to a lower-base margin structure that allows partners to bid up and pin themselves to the top of the search results. Hyatt was the last of the major global chains to go through that transition. [The negotiations] didn't need to become public -- we didn't make it public -- but we got to a great agreement.
Q: How will you continue to try to differentiate from Priceline and Booking.com?
A: Hotel.com's proposition of having a merchant model, where guests can pay in advance and not worry about paying at the desk, as well as an agency model where they pay at the hotel, is what consumers really like. With Brand Expedia, not only do you have merchant and agency models, but you have cars and flights. When you bundle that together, you get amazing deals, so there's an advantage to the multi-pronged strategy. If you look at the portfolio of assets that sit within Expedia, it's unrivaled.