Expedia Sees Tech Grunt Work Paying Off in 2023

25.08.2023 - 14:20 / skift.com / Dennis Schaal

To hear Expedia Group officials tell it, 2023 is shaping up as a year when lots — but not all — of the tough, behind-the-scenes tech work will have been completed, and the company will start to reap the benefits.

Officially, Expedia Group guided toward double-digit top and bottom line growth year over year in 2023.

But having now moved its major online travel agency brands, namely Expedia.com and Hotels.com, to a common tech platform, with vocational rent brand Vrbo up next in 2023, and with a new unified and cross-brand loyalty program in the works this year, then good things are in the offing, the company said.

“Of course, our confidence in our strategy is ultimately only possible because of the underlying technology that we have invested so much in over the last several years,” Expedia Group CEO Peter Kern told financial analysts Thursday as the company released its fourth quarter and full-year 2022 earnings. “This is what has enabled Expedia U.S. to go faster, and all of our brands and geographies, begin to ride on that same tech stack, we will expand our ability to compete and win in more places. Work that created a drag on our business in ’22 and like the migration of Hotels.com to our core platform, become big unlocks for us in ’23.”

Kern highlighted the performance of “Expedia U.S.,” a seldom-used category that was mentioned six times during the call, and that speaks volumes about 2022 because the Group downplayed some geographies and smaller brands because of the tech migration and other factors.

Expedia U.S. saw its loyalty numbers jump 300 percent in the fourth quarter compared with the same period in 2019, and it has nearly 60 percent more engaged app users, the company said.

“Of course, when you look at our all-up B2C (business to consumer) numbers, the accelerating performance of Expedia U.S. has been largely offset by our intentional de-emphasis of some smaller noncore brands or pull back in certain geographies where we did not have the right model, and of course, our much-discussed technical migration, which required significant work and like all migrations resulted in some short-term friction,” Kern said.

In addition to “severe weather” and foreign currency headwinds in 2022, the migration of the Hotels.com tech platform required engineers to focus on that transition and to sacrifice site testing and other front-end improvements.

“We expect our test velocity around optimizing our sites to grow roughly fourfold with the same resources this year as more engineers and product team members are freed up post migration, and our test can be run across our entire base of core OTA traffic,” Kern said. “In other words, we will have many more tests where the winners get deployed across a much