The interview: Dara Khosrowshahi, CEO Expedia

In his keynote address to open this year’s Business Travel Show, Expedia boss Dara Khosrowshahi described his vision of the future of travel. He talked of a new breed of business travellers, and a world where their behaviour and demands are driven by technology. These travellers want user-friendly “delightful” consumer-inspired solutions that work seamlessly across multiple plaforms. They’re willing to share data in exchange for benefits, and want to be part of decision-making. 

This all sounds great for Expedia, suppliers and travellers, but for travel buyers it may sound rather alarming. I ask Dara: what about the threat of disruption to their travel programmes? 

“I think if they embrace solutions that are integrative, that allow corporate customers to have access to the same kind of booking experience that they use on the consumer side, we think that the travel buyer can win,” he says. “That’s really something we’re focused on with Egencia. If you provide that experience, the corporate traveller will be in the programme. You can have a win-win, both for the corporate traveller and for the travel manager as well.”

REAL POWER
Egencia is the travel management arm of Expedia, and benefits from the technology platforms and data capabilities of its giant parent company. Dara says this is a boon for travel managers. “Real-time global data that’s accurate – there’s a real power in that data. Power for you to be able to negotiate with global providers and get better deals for your company – and for making sure it’s a quality provider. It allows you to confer your duty of care in a much more effective way. We do think that power increasingly is a terrific asset that we’re building up for the travel manager.” 

The Expedia group, headquartered in Bellvue, Washington, reported nearly US$4.8 billion revenue on US$39.4 billion of bookings for 2013. Its websites, including brands such as Hotels.com and Trivago, see more than 60 million visitors per month. Travel management company (TMC) Egencia was listed ninth in Buying Business Travel’s Leading 50 TMCs last year, with estimated UK sales of over £200 million.

Last year BBT reported how Expedia believed up to 20 per cent of bookings on the site were for business travel – potentially US$5 billion a year of unmanaged business travel. Is Expedia competing with its own TMC? “I think, in some ways, Expedia and Egencia do compete with each other on the edges,” says Dara. “If you look at Expedia Inc as an entity, we do have a number of brands that do compete with each other.
Hotels.com is competing with Expedia.com, and is sometimes competing with Trivago customers. There’s always significant market of small businesses that don’t necessarily want a managed corporate solution.” 

He adds: “One of the real powers Egencia brings is its ability for consumers to book online and save their companies lots of money. To some extent, Expedia is training consumers all around the world to book online. Then when it comes to their corporate trip, instead of really working hard to get your corporate travellers to book online, it comes easily, because that’s what they do at home anyway. They’re happy to do it, but the travel manager is happier because they’re saving a ton of money on service costs. And then the customer service agent can focus on the trip where their skills are really needed – the complex, multi-item international itineraries, where one of their clients is probably making a change. The right people are being used in the right way.” 

PREDICTING THE FUTURE
With technology driving the pace of progress, surely Dara is best placed to tell us what’s going to be the next big game-changer for business travel? “We’re now going away from designing the businesses to predict the future, to designing them to be incredibly agile to respond to the future much more quickly,” he says. 

“The sitting down, strategic planning and thinking about where the world’s going to be in five years – that’s a fool’s errand now. In five years, Facebook can appear. That totally changed the world. We’re trying to react to the future faster than everyone else.”

REAL-TIME DATA
But Dara does make some predictions. “I do think data is going to be increasingly streamed to consumers and businesses on a real-time basis
on every device out there,” he says. 

“I’ll be able to just point my phone – or watch, or whatever – at you, and look you up, and understand everything about you and your profile. All of that data is going to be streamed real-time – I think that’s going to have some pretty large implications.” 

And he sees change in the way corporate deals are made, saying the traditional, once-a-year discount negotiations will yield to a more dynamic model based on – again – real-time data. He cites
the mobile-only deals that hotels load on to Egencia’s Trip Navigator app as an example. “Our data becomes a real weapon there – for the buyer and the seller,” he says. “The seller puts discounts into the marketplace during times of need – and the more discounts in the marketplace, the better off the buyers are.”

The Expedia boss doesn’t think travel buyers should be worried by the influence of new booking technologies – and his various brands – on their travellers’ behaviour. 

“What we’re seeing is that when you empower people on an individual basis, they tend to actually make very good decisions, not only for themselves but also for the company,” Dara says. “So, for example, when we launch Egencia into corporations and the rate of online adoption increases, often the average prices our customers are paying for hotels go down. They do typically make the right choice for the company.” 

He does, however acknowledge that reviews are becoming an increasing influence on travellers’ decisions, but he believes all the data-rich information is of benefit to both traveller and buyer for making informed choices.

POTENTIAL FOR FRAUD
What about people increasingly trading privacy for convenience or benefits, I ask. Is this a threat to corporations? Dara says corporations have to be very aware of the data standards out there, and exactly what is being shared and how. “There is the potential for fraud,” he says. “You see that in the US – there have been some very significant data breaches. As a corporation, you really have to spend time and money protecting your data from folks who want to steal it. We hire professional hackers who try to hack into our networks – we always have to be on our toes and we really invest there.” 

Dara says he’s a “reformed investment banker” who joined one of his big clients, legendary media mogul Barry Diller, at internet firm Interactive Corp (IAC). Diller is famous for being head of Paramount Pictures in a period when it produced classics such as the Taxi and Cheers TV series, and the film Saturday Night Fever. Diller was also CEO at Fox for several years, where he gave the green light to The Simpsons

Dara says that, at IAC, “we identified travel as a segment, and bought up a number of big travel companies. When that business was spun off to be its own public company, Expedia Inc, I was lucky enough to be the CEO. It’s been a great ride and, hopefully, one that will keep going for a number of years. 

“I came into travel eight years ago, but it’s one of the most fun industries I’ve ever been a part of. I may be in travel for many years to come.”

 

Dara Khosrowshahi is president and CEO of Expedia Inc, which operates more than 150 travel booking sites in over 70 countries worldwide. Its brands include Expedia, Hotels.com, Hotwire, Egencia, Venere, Trivago and, in China, eLong. Khosrowshahi also serves as president of the Brand Expedia business, where he is responsible for the overall strategy and operations of the Expedia brand globally, with a focus on driving innovation and positioning Expedia for further international growth. He has served as a member of the Fanatics.com board of directors since November 2013.
Previously, Khosrowshahi served as CEO of IAC Travel, a division of Interactivecorp. He was instrumental in the initial expansion of IAC’s portfolio of travel brands, which now comprise Expedia.
Before joining IAC, Khosrowshahi served as vice-president at Allen and Company. He holds a BA in engineering from Brown University.

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