Since Expedia closed on its Orbitz transaction on Sept. 17, the teams immediately began integration planning, working quickly to determine how best to bring these two leading travel companies together. One opportunity that lends itself to more customer engagement for the company on a global scale involves the railroad.
Mark Okerstrom, Chief Financial Officer and Executive Vice President Operations for Expedia, talked about this opportunity during Tuesday’s Credit Suisse Technology, Media and Telecom Conference.
“We have spoken about a few opportunities that we are currently going after that are not in your traditional air, hotel, or car segments,” Okerstrom said, according to Seeking Alpha. “We did announce that we are going to be launching a meaningful rail product soon and the goal there is very similar to the goal that we have for air. There is a lot of traffic around rail. There are countries like China investing billions of dollars against rail infrastructures, and it’s already happening around Europe, It is, in many cases, a replacement for air travel. And we think this is going to be a pretty exciting opportunity going forward for us. And I think the good thing is that all these are organic opportunities.”
Okerstrom said it would involve state-owned rail networks.
“That said, there is a lot of deregulation happening, particularly in Europe,” he explained. “Rail companies are able to move into other countries and actually run origin-destination pairing. So it is free enough, but it is a more consolidated market. And I think, just like air though, we do think there is a revenue opportunity in the rail tickets themselves. The real opportunity is around bundling and selling other things to rail travelers.”
What’s more, Okerstrom discussed Expedia’s investment in its air platform.
“What we’ve built is a very unique air shopping and booking experience,” he said. “We continue to test and we’re on making it better, and better, and better, and better. In the past 12 months, we generated about 7.5 billion searches, just to give you a sense of the scale of that. And even though we do actually make a nice amount of money on the air tickets themselves, that’s not the strategic goal.”
What is the strategic goal?
“The strategic goal is that air volume gives us a proprietary stream of traffic,” Okerstrom added. “Traffic that is on our websites right now is telling us where they’re going and what they’re going to do and that give us a great opportunity to cross-sell other things to those travelers, hotel stays, insurance, car rentals, activities, and it’s really something where we’ve just begun to scratch the surface. We did talk a few quarters ago about the fact that we’re now making more money on non-air products from air bookings. And again, we think the runway here is very long.”