Expedia’s HomeAway brand sees room to grow in “alternative housing”
Expedia president and CEO Mark Okerstrom has high hopes for growth in the coming years. Despite recently explaining his view that Expedia was now competing with the likes of Google and Facebook, the online travel expert’s head honcho noted that the global travel industry is worth $1.6 trillion. Expedia’s (admittedly impressive) annual revenue of $10.6 billion (2017) might represent 70% of the online travel agent market – but it’s a drop in the ocean when it comes to travel more generally. Where does Okerstrom see growth coming from? Recently, he suggested that one answer was “alternative accommodations” for travellers and holiday makers.
Expedia’s share price has edged up by 1% so far this year
Source: Yahoo Finance
In a recent interview, Okerstrom said: “Airbnb has done an incredible job, and they have created an industry that is much larger than anyone anticipated. If you believe Airbnb, they say they have five million properties. There are about 1.8 million listings on our HomeAway, which are usually for homes for up to four people. Alternative accommodations are a big business that’s growing very significantly, with a good chance for international expansion.”
As a priority, Expedia is focussing on getting this expansion right – not just in reference to itself, but in regards to the wider industry. Okerstrom continued: “We are working closely with regulators to draw up good legislation on health and safety issues, caps on rental time, and taxes, with cities like Palm Springs and Seattle. The world wants this. Hosts like it; customers like the product. The question is, how do you let it happen?”
One segment of the population that doesn’t want it might be hoteliers, who often refer to Airbnb and the like as “illegal hotels”. But Okerstrom says there are no signs of difficulty there yet – and he thinks Expedia can help hoteliers understand these new competitors better: “There's a lot hotel owners and operators can learn from alternative accommodations. Is there a customer need that’s not being met. So we work with the big hotel ownership groups, to use data to help them understand their strengths and weaknesses and how to figure out offerings that consumers will like.”
He added that Expedia was on track to “double the number” of hotels on its platform – proof positive that the hotel industry (at least for now) knows a good partner when it finds one!
Dominion holds Expedia in its Global Trends Ecommerce Fund.
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