In a move the company’s CEO calls a “game changer,” the Expedia Group is set to launch a rewards program that will tie together its disparate brands including Expedia, Hotels.com and Vrbo, which competes with Airbnb.
Peter Kern says the loyalty program – called One Key – will allow customers who rent a Vrbo to use their points to buy an airline ticket, stay in a hotel or take a cruise.
“We’ve had a lot of different brands over a long period of time (and) they were very discrete,” he says. “They often have different loyalty programs or no loyalty programs. And what we’re trying to say is, we want our customers to get the benefit of all our capabilities and stay in our ecosystem. So, we think the benefit of that is substantial… We think it’s a big game-changer long-term in terms of just the customer experience.”
As for Airbnb, Kern says he isn’t worried losing Vrbo customers due to the online lodging marketplace’s new focus on renting individual rooms.
“They skew to lower ADRs (average daily rates) than we do, partly because we do whole apartments or villas and they do shared spaces, which we have not wanted to get into,” he says. “Depending on the mix of business, that may benefit them or us at any given time depending on where demand is moving.”
And did Vrbo gain business from the complaints about Airbnb’s cleaning fees, and even lists of chores for their guests?
“Those are funny stories, we enjoy those, but it’s hard to detect those little bits of noise. It’s a big marketplace for both of us,” he says.
Q&A
As for the travel industry at large, the head of the Seattle-based OTA had several insights to offer:
Q: The question of the moment in the travel industry is whether demand is going to remain strong. What do you see?
A: We see macro demand pretty strong. It depends where you are in the world, but by and large demand has remained robust, and it’s going to be a busy summer for sure.
Q: Are high prices having any effect on travel spending?
A: We’ve seen travel demand remain quite robust notwithstanding all the economic indicators in the world, and as far as we can tell it’s really that people are prioritizing travel over everything else. Even though travel is somewhat more expensive than it used to be, it’s still the thing that people miss the most and the thing people still want the most in terms of how they spend their money.
Q: Despite record revenue, Expedia still lost money in the first quarter. What happened?
A: That’s not unusual for us in the first quarter. Lots and lots of bookings take place, which means we spend a lot of money in marketing, but a much smaller percentage actually stay (in hotels or vacation rentals) in the first quarter. So, you end up with this typical mismatch of lots of bookings, lots of marketing spend, but not that much actual revenue because revenue is really when people stay.
Q: Your 2021 compensation was eye-popping: The company valued it – with all the stock awards and options – at $296 million if the company does well. Is anyone worth that much?
A: I can’t say if anybody’s worth a number or not worth a number. All of my economics are tied up in the success of the business. So, whether I end up making that or less or more is entirely a function of how the business performs. I think a CEO should be closely tied to the performance of the company.
Expedia TAAP
Through the Expedia TAAP (Travel Agent Affiliate Program), Canadian travel agents can access an agent-friendly online booking platform with competitive commissions on multiple Expedia product offerings, such as hotels, vacation rentals, flights, car rentals, cruises and activities. There is also a suite of tools and technology, including ‘Virtual Agent,’ which allows clients to search for information and modify bookings, as well new enhancements including a shopping experience and dynamic map