A late entrant into India, the US-based Expedia has chalked out an ambitious plan to capture a large share of the country's $22 billion (Rs 1,13,000 crore) travel market. The company believes it still has an edge over other players in the segment in that it offers complete travel packages that would include booking for hotels and buses apart from the flight tickets. In this interview to Saumya Prakash, Dan Lynn, CEO, Expedia Air Asia, speaks about how the world’s largest travel portal plans to make the most of the India opportunity.
What are your thoughts on the major search engines like Bing and Google venturing into the travel vertical? How can online travel agents (OTA) like Expedia combat these giants when it comes to providing consumers with better “decision engines” and facilitating travel planning?
We believe that continued innovation in travel is positive for the industry as long as it does not limit travelers’ access to the full scope of options. Google has been, and we expect will continue to be, primarily a source of traffic to our sites. That said, while search is an integral part of the consumer’s online experience, it is only one piece. Our core proposition has been to provide consumers with complete travel solutions. As the world’s largest online travel market place, Expedia offers a one-stop shop to build, plan and purchase travel solutions across multiple brands, channels and platforms, easing the process for the consumer. We deliver a combination of convenient booking tools, global selection, a wealth of organised content and reviews, the ability to compare and filter hotel features and pricing, and trusted service that can’t be duplicated by a search provider.
The depth and breadth of our global supply and demand footprints afford us a long-term, sustainable growth trajectory that we believe no other company can match.
If you were to do an objective analysis, what are the clear advantages Expedia has over other OTAs in the space… and where do you think can Expedia stand to improve?
As we see, our inherent strengths emanate from the fact that we have access to the largest global inventory of 1,49,000 hotels, 438 flights and 5,000 holiday activities, which enable us to get the price points and deals that no-one else in the market can offer. We have innovative and unique services like build your own trip, 72 hr sale, deal hunter and last minute deals in addition to the regular seasonal campaigns that assist the traveler to customise travel according to his need. In fact, only we offer discounts and deals even during the peak seasons, coupled with the flexibility in modes of payment ranging from credit/debit card, net banking to even cash.
We are focused on enhancing awareness about our offerings, increase penetration and offer a wider inventory to our travelers in India keeping our IQ, innovation quotient, high. We currently offer close to 2,800 hotels and will keep expanding with more customised and relevant deals for the Indian consumers here.
Many people prefer to go to the websites of individual hotels because they get better deals that way. Does it not hamper the online travel sites like yours?
Travel is now about a unique, memorable and seamless experience and the evolving consumer does his share of research to get the best deals befitting his plan. Expedia is a one stop shop that will help the consumer to put together a holistic itinerary, with the airline, hotel and holiday attraction components customised as per their choice.
In fact, when a consumer creates a package at Expedia including hotel and airline both, they end up saving much more than on individual best deals. On an average, Expedia helps the customer save from Rs 25,000-Rs 30,000 on a trip to Europe. This also saves the consumer from multiple transactions though individual websites, which could be tiresome at times. At Expedia, we focus on the entire experience, by offering a complete travel solution.
Being a late entrant in the online travel space do you plan to increase the brand awareness of Expedia in this country?
The Indian OTA market is growing at a rapid rate of about 35 per cent, but the space is cluttered with multiple players. Expedia entered India last year with a very clear brand positioning and target audience. The positioning was ‘big daddy of online travel’ owing to our global scale with a huge inventory all over the world. The sheer scale of the travel inventory helps us get the price points and deals that no-one else in the market can offer.
This year we have launched a complete 360-degree marketing campaign aimed at reinforcing our positioning as the world’s largest online travel player. The end objective is to enhance our brand recall to be one of the top three in India. The campaign aims to make Expedia synonymous with travel and a name that works as a binding factor for travelers globally. The tenor of the ad campaign has been kept real consciously right from the situations to the models used to drive a deeper connect. We have rolled out the campaign nationally across all marketing touch points like print, digital, TV and social medial to maximise the impact.
We are also focusing on engagement with travel bloggers through a contest in association with Indiblogger. The top five bloggers will be sent to an all-expenses-paid trip to five destinations across continents to physically experience Expedia’s presence in the cities.
What have been the challenges to growth in India? Internet penetration here is much lower than many other countries you are present in…
India is expected to be home to the fastest growing online travel market in the Asia-Pacific region in 2012 with gross bookings expected to touch $24 billion and $7.1 billion respectively. Online travel is the driving force in the e-commerce segment, with a global contribution of 70 per cent of all e-commerce activities. While the internet availability, broadband penetration and the prevalence of online banking and credit/debit card is very low in the country, the primary challenges are the external environment in the travel industry. The volatility in the aviation industry not only impacts the inventory and pricing but also the consumer sentiment while buying a travel product. As penetration increases further to tier 2 and 3 cities, there will be an exponential growth in the online travel booking segment.
The share of online travel bookings currently stands at 30 per cent and is expected to rise exponentially as the internet penetration increases in the country. According to a recent IMRB and IAMAI report, the number of internet users has touched the 100 million mark and is expected to grow rapidly, especially with mobiles/ smart-phones also contributing to internet access. The growth drivers include such as rising disposable income coupled with proliferation of the internet, which has increased online traffic considerably.
How important is it for you to have an offline presence?
Talking specifically about the Indian market, owing to a lot of factors like low internet and credit card penetration, and consumers in tier 2 and 3 cities who are still comfortable taking packages from their trusted travel agent, it is important to tap the market through an offline format. Expedia engages with local travel agents through the travel agents affiliate programme and lets them earn additional commission while allowing them to deep-link to worldwide travel products.
We recently announced an increase in the commission for its affiliate agents on air bookings when it is booked as part of a package through the Expedia website. The agents now earn around 10 per cent or more on land content and around 1.5 per cent on the air content for Expedia package bookings, no matter what carrier is booked. That means agents can earn great commission on Expedia packages even when the flight is with a low cost carrier who generally do not offer commission. This programme helps us to tap the brick and mortar formats comprehensively.