Expedia CEO talks tough on China future
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Expedia CEO talks tough on China future

Online travel giant Expedia has a global expansion strategy with a national obstacle: China. The company faces powerful competition from domestic giant Ctrip, as well as familiar western competitors like Priceline. And, for now, Expedia is locked out of the domestic Chinese market. But the company’s CEO, Mark Okerstrom, isn’t willing to quit a market that can’t be ignored – and Expedia is biding its time and finding other ways and places to capture Chinese consumers’ interest.

Expedia’s share price has grown by more-than 3% over the past five days

graph 2811 expedia

Source: Yahoo Finance

In 2017, Chinese travellers accounted for a fifth of all tourism spending. They made 130 million international trips, and spent $258 billion. No company in the online travel space can ignore their importance. So, despite admissions that the company doesn’t “have a real chance of winning” in the domestic market, Okerstrom is pouring attention on Chinese travellers who want to see the rest of the world.

In a recent interview, he said: “We haven’t given up on China. Our big brands – Expedia, Hotels.com – are absolutely serving Chinese travellers. In a totally different world, where the U.S. and China relations are much better, boy, I would love to have a big player in China to be part of the Expedia family.”

For now, Expedia’s focus is on other things: it invested $350 million in Indonesia’s Traveloka last year, and has a long-running partnership with Despegar in Argentina. Okerstrom is looking to grow the company’s international customers segment, which currently accounts for 38% of gross bookings. He’s also looking at a possible acquisition in the corporate travel space to support the company’s Egencia business. But don’t be fooled – when the time is right, Expedia will be looking for a way back into China.

Disclosure
Dominion holds Expedia in its Global Trends Ecommerce Fund.


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