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Expedia’s New CEO on Vrbo, Loyalty, and International Growth

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Ariane Gorin’s first day as Expedia Group CEO was Monday, and she has moved to the home base in Seattle after living in London and Paris for the past 23 years.

That global perspective, she said, will help as the historically U.S.-focused Expedia Group tries to get more international, including in Scandinavia and “perhaps” Japan. In 2023, the company generated 63% of its revenue from U.S. points of sale.

Skift caught up with Gorin Monday in Las Vegas, where thousands of Expedia Group partners gathered for the company’s annual Explore 24 conference over the next two days.

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Here are eight takeaways from the interview:

1. The Priority Is to Grow Organically

Expedia recently completed a tech migration that brought together several of its brands onto one platform. The idea is to unlock growth from within but we also asked about the potential for acquisitions.

Gorin: “There are always things to get done. On technology, the front-end migration is done. On acquisitions, I certainly don’t have anything to show right now. What we will do is be really thoughtful about where does it make sense to deploy our capital. I think we have a lot of great opportunities ahead of us organically. The first thing on my radar is about working to accelerate the growth of our company with all the investments we’ve made the last couple of years. It’s in our hands.”

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2. International Growth Will Be a Focus for Expedia Group

Gorin said she will be spending a chunk of her time on expanding the company internationally for the sake of partners and customers, but the growth may be more tactical than in the past.

Gorin: “What I can tell you is that we’re taking a measured approach as we do it to make sure that we’ve got the right formula to work in different countries. What’s your marketing mix? What are the product specifications you need for that country? I think in the past, perhaps we’ve gone kind of across the board, and I think here we’re being quite measured and thoughtful about where we want to go.”

3. No Retreat on the B2B Business

In the first quarter, Expedia Group’s B2B business, where it powers travel programs for loyalty programs, banks, retail outfits and other travel agencies, generated nearly 29% of revenue. Is Gorin concerned that when Expedia powers travel for a major credit card company that Expedia is losing customers to that bank, making Expedia increasingly weaker? Some analysts have argued that Expedia should abandon such programs.

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Gorin: “I wonder if someone asked Amazon the same question when they started with AWS (Amazon Web Services) to empower other e-commerce players. Travel is a massive $2.3 trillion market. Despite us and other OTAs and large hotel chains, it’s still a quite fragmented market. A lot of people want to be in travel, whether they’re financial institutions who want to add it to a loyalty program, whether it’s long-tail, offline retailers.”

“And so the fact that we can use our technology and our inventory to power them allows us to bring more value to our supply partners and others. It also, I think, creates this nice flywheel of improving the whole ecosystem. And to the question, does it cannibalize? I’m not worried about that.”

4. Expedia Needs to Win Back More Vrbo Customers and Grind Out Improvements

Vrbo, Expedia’s vacation-rental brand, hasn’t bounced back as quickly as hoped following the tech migration that put it on the same platform with Expedia and Hotels.com. We asked Gorin what the issues are.

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Gorin: “We went through the migration in the second half of last year. Whenever you go through any migration, you’re going to take some steps back before going forward. You have to win back the travelers who are having those experiences.”

“At the same time — because we knew that was going to happen — we pulled back in our marketing spend at a time that when there were some competitors that were becoming more active. We’re very bullish on Vrbo. I think it’s got a great brand, a great positioning, and really good supply. And so it’s just a matter of being tenacious, and continuing to grind out improvements.”

5. You Can’t ‘Flip a Switch’ After Introducing a New Loyalty Program

Is the new One Key loyalty program taking longer than expected to get going? Expedia Group last year folded multiple loyalty programs that it previously ran for its Expedia, Hotels.com and Orbitz brands into a single loyalty plan, One Key. Hotels.com had, in some respects, a more lucrative program and many Hotels.com customers haven’t embraced One Key.

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Gorin: “I would just say with any loyalty program there is not going to be a switch that you flip on overnight. We’re happy with the results that we’re seeing. We’ve rolled it out in the U.S., and we’re seeing good sign ups with new members. We’re seeing good signs on repeat bookings and engagement.”

“One of the reasons to put One Key out there was to capture more trips within the Expedia Group ecosystem for a given traveler. And what we found is that people who were using their One Key cash or redeeming their one key cash on Vrbo, if they had earned it on Expedia or Hotels.com, 25% of those people had never used Vrbo before.”

“So they were brand new to Vrbo. For those trip types, we would expect that they would repeat. So it is linking together this house of brands through the One Key loyalty program.”

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6. When It Comes to Offering Discounts, You Have to Realize Some Customers Are Price Sensitive

Expedia is doing a lot more discounting through One Key. Booking.com started doing a lot of this discounting and merchandising a few years ago. Is it getting more competitive? Is it a race to the bottom?

Gorin: “People shop in a lot of different ways. We have to accept that. A lot of travelers out there are price sensitive, and they want to make sure that they’re getting what they’re actually buying. In our One Key program, we have member discounts. We have silver and gold tier member discounts. And we have great engagement from our hotel partners on those because they see that as a way to go get incremental travelers. And then when it comes to merchandising, I think we’re thoughtful about what are the returns relative to other marketing standards.”

7. Expedia Is Testing to See How Big a Deal AI Trip Planners Will Be

Expedia introduced on Tuesday an upgraded version of your AI trip planner, Romie, to assist travelers from not only planning a trip but making changes during the trip. Will these generative AI trip planners become a sweet spot for the use of gen AI in travel?

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Gorin: “I think we’re all testing to see how are people going to interact. We have great success using Gen AI internally, for example, in our call centers, and we’re testing it with some of our commercial teams. Our developers are using it. And of course we have in a bunch of places in the product. So Romie? It’s just another example of us testing things. And then as always, in whatever country, you get feedback from travelers, and then you iterate from there.”

8. Expedia’s Share Price Will Take Care of Itself

Expedia’s stock is down some 30% in the past few months.

Gorin: “I’m focused on having products and experiences that are great for travelers, that partners love and want to be part of, and having an organization that has very engaged and motivated teams that are able to be creative. And I think if we do those things, the rest will take care of itself.”

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