Expedia CEO says Facebook will become a threat to online travel booking
E-commerce isn’t easy, but neither is it about building a large audience to sell to. Facebook has a wealth of the latter, so even if it doesn’t do a great job of selling to its audience, it can still sell a ton of travel. On the other hand, many travel brands launched booking engines on Facebook several years ago and abandoned them due to lack of use.
The CEO of Expedia Inc. expects more business in the world of online travel booking, predicting that Facebook Inc. will follow Google in the business.
Facebook is already working on e-commerce, allowing users to save their payment details on the social media giant’s site and buy the products they see advertised there directly via “buy” buttons. It’s only a matter of time before that turns into vacation booking as well, Expedia CEO Dara Khosrowshahi said in a May 11 interview at the company’s headquarters in Bellevue, Washington.
“We believe travel is such a big part of e-commerce that Facebook will be offering a travel-specific product,” he said.
A Facebook spokesperson declined to comment.
Expedia and competitors like Priceline Group Inc. have grown into massive companies over the past two decades by taking a slice of the hotels and flights travelers book on their websites. Google now allows users to book travel and accommodation directly through its search engine, a feature cited by the US Department of Justice when it approved Expedia’s takeover of Orbitz last year, saying Google was growing competition.
Risks and Opportunities
The development would bring both risks and opportunities for Expedia and its rivals, Khosrowshahi said. Online travel agents could use the social network as a platform to sell their own products, but other entities could as well.
“Social as a channel, Facebook as a channel, none of us quite got it,” he said. “If there is a player who understands social on a large scale, it is a player who is going to steal the share, from us and other traditional players.
For years, hotel companies have tried to find ways to drive more sales through their own websites to avoid the premiums paid to Priceline and Expedia when customers book accommodations and travel through them.
If Facebook gets into travel booking, it will most likely follow Google’s lead, creating a tool that allows hotel chains and online travel agents to appear in search results on the social network, a said Dan Wasiolek, analyst at Morningstar Inc., in an interview. It’s a system that doesn’t necessarily give either group a distinct advantage, he said.
“I don’t see one side benefiting more than the other here, it’s just another way of reaching customers,” he said. “If you have good content, which I think Expedia and Priceline do, you should be fine.”
Facebook has already started playing in the travel space, with a new product that allows hotels and online travel agents to advertise directly to Facebook users who have talked about upcoming trips.
“This new targeted advertising platform is in theory supposed to offer a better way to target travelers when they plan a trip and when they are at their destination,” said Henry Harteveldt, founder of the travel industry research company. travel Atmosphere Research Group. in an interview.
Travel agencies, including Hyatt Hotels Corp. and Air France-KLM, use Facebook’s Messenger app to talk to customers. The same is true for Expedia, said John Morrey, vice president and general manager of Expedia US. This is another area where Facebook could expand its presence, Harteveldt said, either by getting more companies to do business on Messenger or by creating its own in-app booking tool.
Open to acquisitions
Expedia, which turned 20 last week, launched a $6 billion acquisition spree in 2015 when it bought Orbitz and vacation rental company HomeAway. Today, Expedia is focused on integrating those two companies, but it’s still open to smaller acquisitions if they make sense, Chief Financial Officer Mark Okerstrom said.
One area of focus is booking activities. Expedia is already working on building an inventory of activities and attractions such as museum tickets and walking tours that travelers could book with their flights, hotels and rental cars. Startups like GetYourGuide GmbH, Vayable Inc., and Peek Travel Inc. have raised venture capital for their own tour booking websites and apps.
“There are actually a few interesting startups doing interesting things in the space,” Okerstrom said. “We’re always on the lookout for opportunities where we see something that inspires interest to invest in or acquire.”
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This article was written by Gerrit De Vynck of Bloomberg and has been legally licensed by the NewsCred network of publishers.