Expedia CEO: Hotels can improve competitiveness with vacation rentals

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HomeAway may have an edge over hotels in swaying consumers booking a family vacation, said Expedia CEO Mark Okerstrom.

LAS VEGAS -- Expedia Group CEO Mark Okerstrom assured hoteliers attending the Expedia Partner Conference that the rapid rise of Expedia's vacation rental business is not a huge threat, but he did encourage hoteliers to step up their game.

Expedia users searching for vacation accommodations will find a mix of hotel and HomeAway results (Expedia acquired HomeAway three years ago). HomeAway may have an edge in swaying consumers booking a family vacation.

"Do you know how hard it is, as a family of four, to book connecting hotel rooms online?" Okerstrom said. "It's impossible. Hotels have the inventory, but the data is just not there. I think they need to wake up and actually make that available and be competitive for families.

"I also think there are opportunities for people who want a kitchen or a little more room. Our [hotel] chain partners have some incredible product, and we need to showcase that and advertise that more effectively."

Nevertheless, vacation rentals are just "one small piece" of Expedia's business, Okerstrom said. Vacation rentals won't be a fit for every customer.

"You are not going to stay in an alternative accommodation every time you go somewhere," he said. "But if we're going to be customer-centric, then we need to have everything."

Artificial intelligence a game-changer

On the technology front, Okerstrom called artificial intelligence (AI) the most important emerging tool for travel players, particularly in regard to personalization.

"AI just changes the game," said Okerstrom. "We used to take huge data sets and run algorithms on them to tell us what we should do next. This could take us days, but now we're doing that in hours, and hours will go to minutes, and minutes will go to seconds. And 675 million people visit Expedia Group sites every month, so with that type of power and volume, you can start to treat every individual differently in real time. AI makes personalization an absolute reality."

While voice technology is emerging, it won't be impactful on its own. For travel shopping and booking, "it's hard to imagine a world where the best way to communicate the answer doesn't involve a photo or image," he said. Expedia will likely create a more "integrated experience," offering a visual on-screen component to complement information received via voice.

Not straying too far

Meanwhile, Okerstrom emphasized that the company would likely stay laser-focused on building out its existing travel businesses. He said that Booking Holdings' acquisition of restaurant reservation service OpenTable has fallen short of expectations, proving "that you have to be very careful about making assumptions" about synergies between travel and other business verticals.  

Okerstrom expressed interest in pouring significant investment into the company's corporate travel business, which he wants to make "significantly larger." The company is also exploring the addition of more retail stores (Expedia owns travel agency franchise Expedia CruiseShipCenters).

"We have hundreds of stores and power 150,000 travel agents with our technology using our platform," Okerstrom said, adding that physical stores are particularly effective when selling cruise and luxury travel. "Not unlike Amazon, we'll look at how can we use these shops to access more of the market."

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