Expedia Inc. is again No. 1 on the Power List, a position it's held since 2010. Earlier this month, hotels editor Danny King spoke with Expedia CEO Dara Khosrowshahi, who has led the OTA's aggressive efforts to expand its worldwide presence and take on Priceline Group (No. 2 on our list) via acquisitions of smaller competitors; it acquired Wotif and Travelocity and reached an agreement to buy Orbitz Worldwide.
Q: Expedia recently sold its majority stake in China-based OTA eLong. How does this reflect Expedia's strategy for China?
A: It's really about focusing on the China outbound market versus eLong, which focuses on the domestic market. Domestic China has become significantly competitive, whereas the outbound market has incredible potential. But it doesn't signal a divestment. We'll continue to invest in Hotels.com, Egencia and Trivago (the meta-search company Expedia acquired in 2013), and we'll look to complement that with potential mergers and acquisitions.
Q: The Travel Technology Association recently put out a report saying that airlines like Delta that restrict fare listings from some online vendors could cost travelers another $6.7 billion a year in the form of less pricing transparency and the resulting higher fares. Does this concern you?
A: We have a great relationship with Delta. It's a longstanding one that we expect to continue. And we've been aggressively investing in air product to improve speed. From a macroeconomic perspective, though, any time your business is strong, third-party intermediaries have to work harder to justify their worth. We've been through very different cycles [such as] post-9/11 and the financial meltdown. We would prefer strong markets to weak markets, but we want to be able to perform in both.
Q: How would you compare the OTAs' relationships with hoteliers vs. airlines?
A: With hotels, it's generally improved as we've invested in the relationships and, frankly, we've grown our businesses together. We are going to be offering our supply partners much more real-time data about consumer behavior on how they can improve their business, and that'll continue to help improve the relationships. We're in it together.
Q: TripAdvisor has recently made moves to get more travelers to book directly on its sites as opposed to moving on to OTAs and suppliers. Will Expedia deepen its transactional relationship with TripAdvisor?
A: It's the type of transaction that we don't find value to participate in, but we will continue to do business with TripAdvisor. But we'll continue to invest in Trivago, which is the fastest-growing global metasearch player out there.
Q: Do you see Expedia ever doing business with Airbnb?
A: No. We've had a partnership with HomeAway for a year now, and we're working closely with our team to augment our hostel listings. We're focused on building that part of the business with HomeAway.
Q: Priceline Group CEO Darren Huston on an earnings call earlier this year seemed to take a dig at Expedia's acquisition strategy, which he termed "doubling or tripling down on similar brands." Your response?
A: We're one of the largest travel players in the world, yet we're less than 5% of the global marketplace, so we have a long way to go in travel. We still don't offer a full complement of travel products, so we're happy to double or triple down.