Expedia Looks to Loyalty Rollout and Vrbo Tech Migration as Next Hills to Climb
25.08.2023 - 13:40
/ skift.com
/ Dennis Schaal
/ Morgan Chase
Expedia Group officials hope that its Hotels.com brand, which migrated its technology to the Expedia platform last year and saw 20 percent growth in gross bookings in the first quarter of 2023, is a model for good things to come for its Vrbo vacation rental brand this year and beyond.
Vrbo’s platform migration onto the Expedia tech stack, slated to be completed in 2023, along with the projected U.S. rollout of Expedia Group’s new consolidated loyalty program, One Key in July, will help unleash a growth spurt that has been otherwise lagging.
“We’ve got to get over these big humps and then we start — we’ve seen it already when we did the Hotels.com conversion, the migration,” Expedia Group CEO Peter Kern told financial analysts as part of the company’s second quarter earnings announcement Thursday. “We freed up a lot of talent to work on near-term conversion wins, and it’s been hugely productive for us. Again, every time we do one of these, we get more capability back to put against more near-term uplift in the business.”
The backdrop to Vrbo’s migration to the Expedia tech platform is that cities are coming back, which is helping Expedia Group’s hotel business but hurts its vacation rental unit, which has seen flagging demand so far this year.
The platform migration would solve several problems. For one, Expedia.com indeed has some urban short-term rental inventory that is not available on Vrbo, and not all of Vrbo vacation rental inventory is available on Expedia Group’s online travel brands, especially Expedia and Hotels.com.
“So one of the things that the Vrbo migration brings us is the ability to get all that content together,” Kern said. “And that actually will help a lot. And as you think about supply because we’ve had it kind of in pockets as opposed to all available everywhere. And that makes a big difference in supply.”
The loyalty program, too, as well as Expedia’s investments in its app, are long-term plays for increased customer engagement and repeat business, which saves the company from having to spend money with Google and other channels to keep acquiring and reacquiring customers.
The company’s rollout of One Key, which would enable members to earns and burn rewards on its three core brands — Expedia, Hotels.com and Vrbo — would begin in the U.S, and would progressively be introduced abroad in different “flavors,” according to Kern, throughout the rest of the year and into 2024. That’s because some of these three brands are not available everywhere in the world or other brands in the Expedia Group portfolio may be more important in a given region.
Kern said it’s early days in terms of its two generative Artificial Intelligence launches: one as a plugin for OpenAI’s ChatGPT, and