Channel Manager for Expedia

A Brief History of Expedia

Expedia was founded in 1996 as a division of Microsoft, operating as an online travel agency (OTA). Expedia was one of the first OTAs and democratized travel by empowering customers to manage travel plans seamlessly online. Expedia bought Microsoft’s stake in 2001, allowing the company to become an independent public entity.

Over the subsequent decades, Expedia embarked on an ambitious expansion strategy by acquiring several prominent travel fare aggregators and metasearch engines. The acquisitions included Hotels.com, Vrbo (previously HomeAway), Travelocity, Hotwire.com, Orbitz, Ebookers, CheapTickets, CarRentals.com, Expedia Cruises, Wotif, and trivago. The inorganic growth trajectory solidified Expedia’s position as one of the largest online travel companies in the world.

Who Owns Expedia?

Barry Diller, the largest individual shareholder of Expedia Group, owns approximately 29% of the company’s outstanding shares. Diller is a prominent media executive and the founder of IAC, a conglomerate that owns several internet companies, such as Match Group, Vimeo, and Dotdash. Diller has been involved with Expedia since its inception in the late 1990s when it was a division of his company, USA Networks.

Other notable shareholders of Expedia Group include institutional investment firms like Vanguard Group, BlackRock, and State Street Corporation. Both firms hold significant stakes in many publicly traded companies and manage investments for clients, which include pension funds, endowments, and other large organizations.

CEO Peter Kern leads Expedia Group’s management team. Kern joined the company in 2017 and was appointed CEO in 2020. Kern has a background in private equity and has held executive positions at several media and entertainment companies, namely Tribune Media and InterMedia Partners.

Expedia’s Mission Statement

Expedia’s mission statement is “to power global travel for everyone, everywhere.”

The statement reflects the company’s commitment to giving travelers easy access to the best travel products and services. Expedia offers innovative technology solutions, too, making the travel experience more enjoyable and convenient.

Expedia’s mission statement emphasizes the company’s goal of making travel accessible to people from all over the world, regardless of location or background, aligning with the core principle of inclusive travel.

How Expedia Works

Expedia is an online travel agency that offers a platform for travelers to search and book flights, hotels, rental cars, cruises, and other travel services. Expedia operates on an agency model, where the company facilitates travel bookings and acts as the agent in the transaction, passing reservations booked by the traveler to the relevant travel provider.

Expedia earns revenue through commissions or ticketing fees from the travel supplier and traveler. Expedia’s business model revolves around offering platforms for searching flights and other travel reservations. By aggregating travel options in one place, the company encourages many travelers to use the Expedia site for quick and convenient travel bookings.

Expedia offers loyalty programs, such as Expedia Rewards, to incentivize customers to book through the platform and earn rewards points redeemable for future travel bookings. Expedia has an extensive portfolio of brands to respond to different traveler needs and preferences. Some well-known brands include Expedia.com, Hotels.com, Hotwire, Orbitz, and Travelocity.

Through Expedia’s subsidiary, Expedia Partner Solutions, the company provides technology, tools, and services to help other travel companies achieve business growth. To generate revenue, Expedia makes available various services provided by lodging properties, airlines, car rental companies, and cruise lines. The company offers travel insurance and business travel services as well.

Expedia invests heavily in marketing to attract customers and increase travel spending. Overall, Expedia’s technology and partnerships with travel providers allow the platform to offer customers a wide selection of travel options while generating revenue through commissions and fees.

How Expedia Makes Money

Expedia makes money by selling travel products and services on a stand-alone and package basis through the following business models:

Merchant Model (Reselling of travel packages and commission fees)

Under the merchant model, Expedia purchases travel packages as a merchant and resells the packages to customers at a slightly higher price. The model allows Expedia to make a profit from the increased margin. Expedia occasionally makes commission fees from hotels, increasing the company’s exposure through the Expedia website.

Agency Model (Commissions on bookings)

The agency model involves Expedia intermediating between customers and travel suppliers. Expedia earns a commission for each booking made through the website. The model allows Expedia to offer numerous travel options to customers without having to purchase and resell travel packages directly.

Advertising Model (Advertising)

Under the advertising model, Expedia generates revenue by providing advertising space to travel suppliers and other businesses. Suppliers pay the company to display their products and services on the Expedia website. The model allows Expedia to generate revenue without directly purchasing or selling travel products.

Expedia also generates revenue through B2B travel programs and booking fees. The company had gross travel bookings of $104.8 billion flow in 2023, making Expedia one of the largest travel booking websites in the world.

Expedia’s Brand Portfolio

Expedia boasts a strong brand portfolio and consistency in product and service enhancements, combined with the company’s global scale and broad-based supply. With a significant global audience of travelers, Expedia provides value to supply partners by better illustrating travel retailing and consumer demand and reaching consumers in other markets.

Expedia’s deep product and supply footprint allows the platform to tailor offerings to target different types of consumers and travel needs, employ geographic segmentation in global markets, and leverage brand differentiation, among other benefits.

In 2021, Expedia shifted to more of a unified brand strategy with an increased focus on uniting the company’s retail brands and teams under one centralized group. For example, Expedia announced plans to unify and expand the company’s existing loyalty programs into one global rewards platform spanning all products and international brands.

Retail Segment

Expedia’s retail segment provides a full range of travel and advertising services to customers worldwide through recognized consumer brands. Expedia’s portfolio of retail brands includes:

• Brand Expedia: A leading full-service online travel brand with localized websites in many countries worldwide, offering a broad set of travel products and services.
• Hotels.com: Focuses on marketing lodging accommodations with a vast footprint of localized websites worldwide.
• Vrbo: Operates an online marketplace for the alternative accommodations industry. The Vrbo portfolio includes the vacation rental website, Vrbo.com, which uses localized websites worldwide and other regional brands.
• Other brands, like Orbitz, Travelocity, ebookers, and Wotif Group.

Other Segments

• B2B segment : it encompasses the Expedia Business Services organization, which includes Expedia Partner Solutions. Expedia Partner Solutions partners with businesses in a broad spectrum of countries across a suite of travel and non-travel verticals, including corporate travel management, airlines, travel agents, online retailers, and financial institutions, that market Expedia Group rates and availabilities to travelers.
• Trivago Segment : Expedia’s trivago segment generates advertising revenue from sending referrals to online travel companies and travel service providers from the platform’s hotel metasearch websites. trivago, based in Dusseldorf, Germany, is Expedia’s majority-owned hotel metasearch company.

Expedia’s Marketing Strategy

Expedia intends to build and maintain the value of its various brands, drive traffic and bookings through its multiple brands and businesses, optimize ongoing traveler acquisition costs, and strategically position its brands relative to one another.

Expedia’s long-term success and profitability depend on the company’s continued ability to maintain and increase the overall number of traveler transactions flowing through the brand and shared global platforms cost-effectively, plus to attract repeat customers.

Expedia manages marketing investments holistically across the brand portfolio in the retail segment to optimize results and make decisions on a market-by-market and customer segment basis based on the relative growth opportunity, the expected returns, and the competitive environment.

Expedia’s marketing channels include online advertising, such as search engine marketing and optimization, as well as metasearch, social media websites, brand advertising through online and offline channels, loyalty programs, mobile apps, and direct and personalized traveler communications on the platform’s websites and through direct e-mail communication with travelers.

Expedia’s marketing programs, strategy, and initiatives involve promotional offers such as coupons and seasonal or periodic special offers from travel suppliers.