Bloomberg Businessweek
Go To Businessweek.com
During the past 20 years, the author has watch China move from being a developing country into an industrial superpower
Money Moves, 5/24: Chocomize Co-Founder Fabian Kaempfer talks with Bloomberg’s Deirdre Bolton about the business of customizing chocolate
The president's campaign has a new rule—no cell phones allowed
In honor of remote control inventor Eugene Polley, we recognize other influential but neglected inventors who have felt the sting of stolen glory
Forget Adderall. Traders now pop chia seeds to stay focused and energized
The Italian automaker and others are adding hybrid technology to elite cars
The storied bridge that links San Francisco and Marin County changed the face of California
Schools cultivate ties with startups before they're big successes
Dave McClure's traveling venture capital show scours the world for promising startups
(page 2 of 2)
In several important ways, Expedia’s push to personalize travel—“delivering a pleasant, positive surprise,” in the words of President Scott Durchslag—marks a return to the bricks-and-mortar travel agent of old who could steer you clear of a dodgy hotel or restaurant. The twist is that your modern “agent” would be a collection of friends and acquaintances conversing about travel. That would be very different from the way most online shopping for leisure travel takes place today: Visit an airline or hotel site, mix in an online travel agent (or four), check an aggregator site such as Kayak or Fly.com, search Google, find a hotel discount site, worry about whether the posted prices are reasonable, become frustrated. Repeat the process. And then your trip is booked.
Expedia’s three-year strategy, still in its infancy, envisions an online “place market” akin to the bazaar overseen by Amazon.com, on which competing retailers post their wares and prices with buyers’ comments. Expedia also wants to know where you’re considering going for your next few trips, to align your personal interests and dislikes with your network and customize it all into an integrated networking-cum-travel shopping experience. “Consumers are eager to engage, if you can do it in interesting, meaningful ways,” Megibow says. Gone would be the guesswork of ascertaining what is a reasonable rate, how small or clean the room really is, or the best time to visit a particular beach. You might also become a loyal Expedia shopper, curbing your travel site promiscuity.
There’s already some evidence that social networks spur sales in the travel industry. Delta Air Lines has been selling tickets directly through a Facebook page for more than a year; most airlines still link you back to their own sites to purchase anything. Facebook, with its 800 million users, referred 15.2 million visitors to hotel websites in 2010, a 35 percent jump from the prior year, according to a July 2011 PhoCusWright study on social media’s role in travel. Of that number, about 568,000 resulted in a booking—a “conversion rate,” in industry parlance, of 4 percent. That’s far higher than expected, and higher than the conversion rate from travel-review sites, said Quinby, one of the report’s authors.
“When we saw the results from the data, we kind of did a double take internally and went back to our partners and had them double check,” he said. “I think it’s some very provocative circumstantial evidence that there’s something going on.” One possible explanation: Knowing someone who stayed at a particular hotel or resort makes you want to have the same experience. You’re keeping up with the Joneses, in essence, and will have something additional in common.
The report also found that the number of hotel reviews posted online is increasing, to 1.1 million in 2010, the latest data available. That trend, coupled with further networking tools, could pose a threat to the largest source of online hotel reviews, TripAdvisor. The Newton (Mass.)-based company, which spun off from Expedia in a Dec. 20 public offering, pioneered the role of hotel reviews and turned it into a business valued at nearly $4 billion. TripAdvisor licenses its 50 million reviews to some 300 clients and says it adds 25 fresh reviews per minute. The bulk of its income comes from referring traffic to hotel booking sites. TripAdvisor founder and Chief Executive Officer Stephen Kaufer said he’s not concerned if Expedia and others jump into social travel with more editorial content, encroaching on an area TripAdvisor has owned nearly exclusively. “I think they have a couple of years before they’re able to catch up with where we were five years ago,” Kaufer says.
That’s where Expedia thinks bloggers can help. Expanded posts on travel adventures, supplemented with user reviews and comments, might draw in more travelers. The online travel agents have been pushing to expand the number of reviews travelers post. Orbitz saw its review count jump 300 percent in 2010, while Expedia says it has collected more than 5 million user reviews to date.
Both company and bloggers say they aren’t concerned that readers may be turned off by commercial relationships between the travel agent and writers. Kim Mance, a Brooklyn, N.Y., video blogger and co-founder of Galavanting, a site aimed at female adventure travelers, says disclosure is important for readers but bloggers need to retain the mission and voice that garnered an audience in the first place. “Bloggers will miserably fail and lose their audience if they piss them off,” Mance says.
Bloggers say they’re ready to deliver travel tales and potential new Expedia customers—so long as they are compensated with exposure and cash. “I’ve spent five years traveling and building up an expertise and a following,” says Sherry Ott, a blogger from South Dakota who was among the Expedia visitors in Seattle. “I want to be able to be paid for my knowledge and for access into my audience.”
Bachman is deputy news director for Bloomberg Businessweek.
