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Diego J. LofeudoRegional Manager MMEA
Expedia Lodging & Destinations
Rhodes Tourism Forum 2005
Trends and Innovation in the Tourism Industry
Agenda of today
1. The shift within distribution channels2. Expedia Travel and mission 3. Opportunities ahead4. Becoming a virtual Tour Operator
Hotel Room Bookings by Distribution Channel (2002)
Distribution Channel % Share
Hotel Direct 65% - 70%
In Person 5% - 10%
Travel Agent 10% - 15%
On Line 5% - 10%
Source : Bear Stearns, 2002Source : Bear Stearns, 2002
Shift in Distribution channels
Hotel Room Bookings by Distribution Channel (2002 vs. 2005)
Source : Bear Stearns, 2002Source : Bear Stearns, 2002
Shift in Distribution channels
% ShareDistribution Channel
2002 Projected 2005
Hotel Direct 65% - 70% 60 - 65%In Person 5% - 10% 5% - 10%
Travel Agent 10% - 15% 5% - 10%On Line 5% - 10% 10% - 20%
Hotel Rooms Sold Online
Source 1999 2000 2001 2002 2003*
Hotel Websites 56% 55% 54% 54% 54%
Online Agencies 44% 45% 46% 46% 46%Source : PhoCus Wright 2001Source : PhoCus Wright 2001
Agenda of today
Expedia Travel and its mission
Be the Largest Seller of Travel in the World
CustomersCustomers
Expedia GlobalTravel Marketplace
AirlinesAirlines
SuppliersSuppliers
Car Car RentalRental
LodgingLodging
Cruise Cruise LinesLines
Destination Destination ServicesServices
Vacation Vacation PackagersPackagersWhere everyone Where everyone
everywhere everywhere researches and buys researches and buys everything in traveleverything in travel
IAC Travel’s Broad Market Approach
US Consumer
Corporate
Private Label International
KEY FACTS18 million consumers every month
70.000 air tickets / day
Y2004Gross bookings over $13.2billion - #1 online TT OO.
Number 5th TT OO online and offline (Travel Weekly’s agency survey 2003)
54,000 hotel properties, more than 18,000 of which participate in the Expedia® Special Rate (ESR) program
WWTE & IAN white label program
No 1 seller of rooms nights online, over 35 millionbooked Y2004
Leading Travel Sellers Worldwide
1 American Express + Rosenbluth
$20.7B
2 TUI $13.7B
3 Carlson Wagonlit $12.5B
8 WorldTravel BTI $5.3B
9 First Choice $3.7B
10 Travelocity $3.5B
11 AAA Travel $3.16B
12 Orbitz $2.5B
13 Kuoni $2.47B
14 TQ3 Maritz Travel $1.6B
15 Cendant Travel $1.2B
4 JTB $11.5B
5 IAC Travel $8.2B
6 My Travel $6.0B
7 Navigant Travel $5.34B
Jan 2004Jan 2004
Jan 2005 Jan 2005
$13.2bn$13.2bn
Agenda of today
Opportunities ahead
The Worldwide Travel Market
Source: Data as of 2003 from WTTC, Jupiter Research & Expedia estimates
$2.6 Trillion Travel and $2.6 Trillion Travel and TourismTourism $850B$850B
TravelTravel
$1,750B$1,750BDestination ServicesDestination Services
$350B$350BEuropeEurope
$850 Billion $850 Billion TravelTravel
$281B$281BOtherOther
$219B$219BU.S.U.S.
0%
20%
40%
60%
80%
100%
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2011
2012
Online Penetration of International Travel Market
50% - $225B
30%- $135B
Onl
ine
as %
of T
otal
Mar
ket Total Market Size:
2002: $350B2010: $450B
1% or$4B
Onlinein 2002
IACTExpectation
GrossBookings
European Growth Projections
European online travel projections
57%
65%
37%
27%
0
10
20
30
40
50
60
70
2002 2003 2004 2005 2006 2007 2008
($bn)
UK
FR
DE
Other
CAGR
CAGR42%
Source: PhoCusWright Inc, IACT Analysis
Agenda of today
Becoming THE Virtual Tour Operator
Bringing them all together
CarsCars
HotelsHotelsAirAir
VacationVacationPackagesPackages
CruisesCruises
4 ways to address this Opportunity
Source: Data as of 2001 from WTTC, Jupiter Research & Expedia estimates
1. Secure an array of services1. Secure an array of services
Flights, Cars, HotelsFlights, Cars, Hotels
Cruises and GuidebooksCruises and Guidebooks
Merchant HotelsMerchant Hotels
Jan 2001
ESP and Basic PackagingESP and Basic Packaging+
1996May 2002
Destination ServicesDestination Services
Dynamic PackagingDynamic Packaging+
Growing our product variety19982000Sept 2001
Win – Win supplier relationships
• TO Flex– TO Merchant model– Flexible: hotel controls its rate and inventory at all times– Transparency– Massive but tailor made marketing and merchandising
opportunities – No Fix Cost– Result driven scenario– Last minute, early birds– State of the art technology
4 ways to address this Opportunity
Source: Data as of 2001 from WTTC, Jupiter Research & Expedia estimates
1. Secure an array of services1. Secure an array of services
2. Securing demand2. Securing demand
Television
An Array of Distribution Channels
Corporate Site and Agency
Traditional Agents (Classic)
International Websites
Consumer Website
4 ways to address this Opportunity
Source: Data as of 2001 from WTTC, Jupiter Research & Expedia estimates
1. Secure an array of services1. Secure an array of services
2.2. Capture demandCapture demand
3.3. MerchandiseMerchandise ! ! MerchandiseMerchandise !!
Different Markets Require Different Messages…
Canada: Empowers Canadians to get the holiday
that’s right for them
UK: The perfect trip
Hotels.com UK: value for moneyFrance: Wide choice,
good value
Outdoor Campaigns – on the buses
On the tube…
Heathrow
In the mediaExpedia Ads
The Queen
On TV…
More TV…
Expedia.co.uk – Amsterdam City Page
Dynamic Rate Rules – An example
Weekly Newsletter• E-mail sent out on a
weekly basis
• Compelling price offers that fit with the theme of the mail can be featured –specific hotels can be featured
• E-mail has opening rate of 40%
NewsletterNewsletter
4 ways to address this Opportunity
Source: Data as of 2001 from WTTC, Jupiter Research & Expedia estimates
1. 1. SecureSecure an an arrayarray ofof servicesservices
2.2. Capture Capture demanddemand
3.3. MerchandiseMerchandise ! ! MerchandiseMerchandise !!
4.4. ConvertConvert throughthrough technologytechnology
Latest news about technology
• Introduced new options for hoteliers to showcase and promote their properties, including intricate neighborhood maps to pinpoint hotel locations, 360-degree virtual tours of hotel rooms and common areas, expanded photo displays and multiple-room booking option.
• Acquired Newtrade Technologies Inc. to provide enhanced connectivity to hotels and improve Expedia’s efficiency and reliability as a seller of hotel rooms
Conversion driven by ESP PlatformExpert Searching and Pricing
• PC/NT architecture– Fully scaleable– Lower cost– Flexible
• Proprietary code & algorithms
• Every product is a component
• Turns the lights on in the shop
• Higher conversion
TravelersTravelers
Browser, Phone, PDABrowser, Phone, PDA
SQLDatabase
DataWarehouse
ESP ESP -- The Expert Searching & Pricing Platform The Expert Searching & Pricing Platform
Fare Server Fare Server FarmFarm LodgingLodging
ViatorViator(Destination (Destination
Services)Services)
Fares Rules Schedules Availability Pegasus Worldspan TravelscapeVacationSpot Tours Transportation Events
SQLDatabase
TravelServers
TravelServers
TravelTravelServersServers
WebServers
WebServers
WebServers
TravelersTravelers
Browser, Phone, PDABrowser, Phone, PDA
SQLDatabase
DataWarehouse
ESP ESP -- The Expert Searching & Pricing Platform The Expert Searching & Pricing Platform
Fare Server Fare Server FarmFarm LodgingLodging
ViatorViator(Destination (Destination
Services)Services)
Fare Server Fare Server FarmFarm LodgingLodging
ViatorViator(Destination (Destination
Services)Services)
Fares Rules Schedules Availability Pegasus Worldspan TravelscapeVacationSpot Tours Transportation Events
SQLDatabase
TravelServers
TravelServers
TravelTravelServersServers
TravelServers
TravelServers
TravelTravelServersServers
WebServers
WebServers
WebServers
WebServers
WebServers
WebServers
Destination Services
Packages
Unbundling the Package
Retail LodgingDemand
LodgingSupply
• Unprecedented choice and product combinations
• Powerful tools for building a personalised package
• No hidden costs or surcharges
• Great deals
Customer Benefits
• Another sales and distribution tool
• Increased merchandising opportunities
• Tactical opportunity for moving inventory
• Business model avoids incremental costs – i.e. Brochures
Supplier Benefits
• Extension of current merchant business
• Higher Margin• Technically
complex to execute
• Key point of differentiation
Expedia Benefits
New Homepage
New BundleWizard
Packaging Technology:The Search Engine
www.expedia.co.uk
www.virgin-express.com
Packaging Technology:The Search Engine
drop down menupre loaded
with 50 destinations
user has a choice of 400destinationsworldwide
Package Technology: Results Page
user can changeitinerary
sort function enables theuser to slice
and dice resultsaccording to
personalpreference
Package Technology: Flight Options
flight resultscan be listed
based onIndividual
criteria
option to choosecarrier
Package Technology: Flight and Hotel Details
user is ableto upgrade
room ifapplicable
Package Technology: Car & Insurance Cross Sell
both ancillariesare optional
extras
6.7%
Everything changed !!
Nothing changed !!
Customer Care+900 people 24/7 !
Brian TerryBrian TerryLysefjordLysefjord , Norway, Norway
Thank [email protected]
Questions ?