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Web 3.0 and Expedia

Posted on Tuesday, May 1st 2007

We have been discussing the online travel industry and have covered Yahoo! Travel, TripAdvisor, Travelocity and Orbitz from a Web 3.0 perspective earlier. Here we will take a look at Expedia’s offering.

Expedia is the largest online travel content company, headquartered in Bellevue, WA. The Company is the third largest travel company in the US, and the fourth largest travel company in the world. It gets over 19 million unique monthly visitors. Expedia has topped the list for highest customer satisfaction ranking by American Customer Satisfaction Index (ACSI) and was awarded the Customer Loyalty Award by Brandweek in 2006 for online travel.

Context
I like the way the site has covered contextual nuances including Adventure, Romance, Beach, Family, Luxury, Golf & Spa themes. Expedia however misses out on a number of such clusters, for instance, student travel.

What if I am a student and looking to travel to Italy on a tight budget? Not only would I need a specific set of Youth Hostel type lodging options, it would also be great to have an opportunity to network with those of the same age who are planning to visit Italy during the summer. It would take travel and social networking to a different level, and replicate a piece of real-life user experience in a vastly more efficient manner.

The other problem with Expedia’s treatment of Context is that it focuses on packaged activities, rather than organizing their content and inventory by Context. Thus, while they start with a promise, Expedia doesn’t finally deliver!

Besides these, Expedia has the obvious nine categories, Flights, Hotels, Cars, Vacation Packages, Cruises, Activities, Deals & Destinations, Maps and Corporate Travel. Itinerary maps are a good idea and Expedia has done a good job by marking prominent landmarks, which makes it easier for the travelers to choose their hotels.

Content
Expedia has more than 500 business partners. It has more than 25,000 merchant hotel properties, including more than 10,000 in Europe, Asia, /Pacific regions. Over 30% of merchant properties are directly connected, offering real-time availability, rates and amenities. In fact, the ability to narrow choices down by amenities is a great feature, although, the range of amenities and hotel classes covered could be agreat deal more comprehensive. The most notable ommission is the student category, and I had a hard time finding budget hostels in Italy, using the example above.

Expedia travelers have created over 100,000 quality reviews of hotel stays covering more than 15,000 properties. Even though Expedia and TripAdvisor are both owned by IAC, I find it surprising that there is very little integration between the two.

Expedia serves customers in the United States and the world through its global site Expedia.com. It also has country specific sites for Canada, the United Kingdom, France, Germany, Austria, Italy, the Netherlands, Norway, Australia, Spain and Japan, with localized content.

Expedia, enabled by RazorGator, allows consumers to book or purchase tickets for different activities across the world which means I can book tickets for a Broadway theatre or a NCAA Football game. The site promises its users Best Price Guarantee and allows a refund coupon of $50 to anyone who gets a better deal than what is offered by Expedia.

Community
Expedia users can share their travel experiences through hotel reviews and photo sharing. The site also provides RSS Feeds. However, Expedia lags Yahoo! Travel and TripAdvisor in community features, the latter, as I said before, is strange, considering the ownership structures of the two sites. The easiest way to bridge Expedia’s Community feature gap would be to put in place that integration.

Besides that, I also discussed the opportunity for social networking for student travelers under Context-specific offerings.

Commerce
Expedia is the number one travel agency and earns commission on hotels, flights, vacations, cruises and cars booked through its site. Expedia charges $5 as booking fee for flights. It has tie-ups with a large number of airlines, hotels, car rental companies, etc. The site has as many as 500 marketing partners, and does a very good job facilitating context-specific commerce.

Personalization
Expedia allow users to plan their trips, make bookings for tickets and make changes to travel dates, which is useful for those who need to reschedule their journey without incurring any additional charges. Fare Alert sends low fare and discount alerts to users, a pretty common and elementary personalization feature.

Nonetheless, very little true personalization is offered through the site.

Vertical search
Vertical search features in Expedia, as I mentioned earlier, starts users out with high hopes, but doesn’t deliver. They need to organize content in a way that Context-specific vertical search can be made possible. But frankly, they don’t understand any of the concepts: Context, Search or Personalization.

Business model
Expedia earns most of its revenue from commissions from travel services
Moreover, with an Alexa ranking of 426, Expedia is a favorite destination for advertisers. According to comScore, Expedia with a click through rate of 4.9% for sponsored ads is ahead of Orbitz (4.4%) and CheapTickets (4%). The advertising rate for Expedia ranges between $15 – $65 CPM.

Web 3.0 Rating: Context: B+, Content: A-, Community: B, Commerce: A, Personalization: B, Vertical Search: B; Overall Rating: B+

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http://buhlerworks.typepad.com/buhlerworks/2007/05/web_30_4c_p_vs.html

Joe Buhler Tuesday, May 1, 2007 at 3:39 PM PT

[…] Expedia (NASDAQ:EXPE) is the largest online travel content company, headquartered in Bellevue, WA. The Company through its portfolio of well-recognized brands like, Expedia.com, TripAdvisor.com, Hotwire.com, Hotels.com, Expedia Corporate Travel, Classic Vacations® and a range of other US-based and international businesses that provide travel products and services to leisure and corporate travelers. […]

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check the link
http://www.expediainc.com

for more details of their business

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Nice. Hey you should check out http://www.OurPlaybook.com

Sports Community Monday, July 14, 2008 at 8:59 PM PT

One of the intents of the Venere purchase was to provide a platform for smaller venues that simply couldn't afford the high margins of the merchant model. This could (theoretically) include hostels. Because hostels' margins are already so low, there is very little incentive for them to go up market to a site that makes most of its money from 3 – 5 star hotels. Likewise, Expedia makes 60% of its money from hotels and 0% from air. The ultra-price sensitive student traveler staying at a $15 a night hostel is simply not worth their efforts.

That being said, there is plenty of room in the market for a global clearing house of all hotels. Airbnb figured out a good chunk of this model by placing the inventory and relationship management 75% on the lodging establishments. Global Hotel Index basically scraped as many phone books as they could and built the second largest database I of hotels out there (Expedia, coincidentally, has the largest…they just don't use it for production).

patrick Friday, October 14, 2011 at 6:41 PM PT