Rhodes Tourism Forum 2005 Trends and Innovation in the Tourism Industry

Transcription

1 Rhodes Tourism Forum 2005 Trends and Innovation in the Tourism Industry Diego J. Lofeudo Regional Manager MMEA Expedia Lodging & Destinations

2 Agenda of today 1. The shift within distribution channels 2. Expedia Travel and mission 3. Opportunities ahead 4. Becoming a virtual Tour Operator

3 Shift in Distribution channels 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, 2002

4 Shift in Distribution channels Hotel Room Bookings by Distribution Channel (2002 vs. 2005) % Share Distribution 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% Source : Bear Stearns, 2002

5 Hotel Rooms Sold Online Source * Hotel Websites 56% 55% 54% 54% 54% Online Agencies 44% 45% 46% 46% 46% Source : PhoCus Wright 2001

6 Agenda of today Expedia Travel and its mission

7 Be the Largest Seller of Travel in the World Suppliers Airlines Expedia Global Travel Marketplace Car Rental Customers Where everyone everywhere researches and buys everything in travel Lodging Vacation Packagers Cruise Lines Destination Services

8 IAC Travel s Broad Market Approach US Consumer Private Label Corporate International

9 KEY FACTS 18 million consumers every month air tickets / day Y2004 Gross 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 million booked Y2004

10 Leading Travel Sellers Worldwide Jan American Express + $20.7B Rosenbluth 2 TUI $13.7B 3 Carlson Wagonlit $12.5B 4 JTB $11.5B 5 IAC Travel $8.2B 6 My Travel $6.0B 7 Navigant Travel $5.34B 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 Jan 2005 $13.2bn

11 Agenda of today Opportunities ahead

12 The Worldwide Travel Market $2.6 Trillion Travel and Tourism $850B Travel $281B Other $850 Billion Travel $219B U.S. $350B Europe $1,750B Destination Services Source: Data as of 2003 from WTTC, Jupiter Research & Expedia estimates

13 Online Penetration of International Travel Market Online as % of Total Market 100% 80% 60% 40% 20% 0% 1% or $4B Online in % - $225B IACT Expectation 30%- $135B Total Market Size: 2002: $350B 2010: $450B Gross Bookings

14 European Growth Projections ($bn) 70 European online travel projections CAGR 60 Other 57% CAGR 42% DE 65% FR 37% 10 UK 27% Source: PhoCusWright Inc, IACT Analysis

15 Agenda of today Becoming THE Virtual Tour Operator

16 Bringing them all together Hotels Vacation Packages Air Cars Cruises

17 4 ways to address this Opportunity 1. Secure an array of services Source: Data as of 2001 from WTTC, Jupiter Research & Expedia estimates

18 Growing our product variety May 2002 Sept Jan Dynamic Packaging Destination Services + ESP and Basic Packaging Merchant Hotels Cruises and Guidebooks Flights, Cars, Hotels

19 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

20 4 ways to address this Opportunity 1. Secure an array of services 2. Securing demand Source: Data as of 2001 from WTTC, Jupiter Research & Expedia estimates

21 An Array of Distribution Channels Television Corporate Site and Agency Traditional Agents (Classic) International Websites Consumer Website

22 4 ways to address this Opportunity 1. Secure an array of services 2. Capture demand 3. Merchandise! Merchandise! Source: Data as of 2001 from WTTC, Jupiter Research & Expedia estimates

23 Different Markets Require Different Messages UK: The perfect trip Canada: Empowers Canadians to get the holiday that s right for them France: Wide choice, good value Hotels.com UK: value for money

24 Outdoor Campaigns on the buses

25 On the tube

26 In the media Expedia Ads The Queen Heathrow

27 On TV

28 More TV

29 Expedia.co.uk Amsterdam City Page

30 Dynamic Rate Rules An example

31 Newsletter Weekly Newsletter 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 has opening rate of 40%

32 4 ways to address this Opportunity 1. Secure an array of services 2. Capture demand 3. Merchandise! Merchandise! 4. Convert through technology Source: Data as of 2001 from WTTC, Jupiter Research & Expedia estimates

33 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

34 Conversion driven by ESP Platform Expert 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 Travelers Browser, Phone, PDA Web Web Servers Servers Web Servers Travel Travel Travel Servers Servers Servers SQL Database Data Warehouse SQL Database ESP - The Expert Searching & Pricing Platform Fare Server Viator Destination Farm Lodging (Destination Services) Fares Rules Schedules Availability Pegasus Worldspan VacationSpot Travelscape Tours Transportation Events

35 Packages

36 Unbundling the Package Customer Retail Benefits Unprecedented choice and product combinations Powerful tools for building a personalised package No hidden costs or surcharges Great deals Lodging Supplier Demand Benefits Another sales and distribution tool Increased merchandising opportunities Tactical opportunity for moving inventory Business model avoids incremental costs i.e. Brochures Lodging Expedia Supply Benefits Extension of current merchant business Higher Margin Technically complex to execute Key point of differentiation

37 New Homepage New Bundle Wizard

38 Packaging Technology:The Search Engine

39 Packaging Technology:The Search Engine drop down menu pre loaded with 50 destinations user has a choice of 400 destinations worldwide

40 Package Technology: Results Page user can change itinerary sort function enables the user to slice and dice results according to personal preference

41 Package Technology: Flight Options option to choose carrier flight results can be listed based on Individual criteria

42 user is able to upgrade room if applicable Package Technology: Flight and Hotel Details

43 both ancillaries are optional extras Package Technology: Car & Insurance Cross Sell

44 6.7%

45 Everything changed!!

46 Nothing changed!!

47 Customer Care +900 people 24/7!

48 Brian Terry Lysefjord, Norway

49 Thank you

50 Questions?