Download - Expedia + Hotels.Com Presentation Final Feb 09

Dublin Hotel Website Marketing ConferenceCharlotte Gogstad17th February 2009

3rd Party Partners

© 2007 Expedia. Confidential and proprietary. All rights reserved. Expedia Partner Services Group | 2

AGENDA

1. WHO • Who are Expedia

• Our Global Footprint

• Access to Demand

2. WHY • Evolution in Online Travel

• Trends in Travel Distribution

3. HOW• 5-STEP of Partnering with an OLTA

• THE OLTA’s investment in demand

• What does it mean for Irish hotels


AGENDA









© 2007 Expedia. Confidential and proprietary. All rights reserved. Expedia Partner Services Group |

Expedia holds a leadership position in nearly every geographic market where we are present

Unmatched global marketplace of brands

No.1 hotel specialist, in 42 countries

Leading discount travel site reaching price-conscious travelers

Leading online travel service provider in China

On-demand, full-service corporate travel agency operating in nine countries

No.1 community player with more than 15 million reviews and opinions

No.1 OLTA, in 19 countries

Operating more than 100 in-market concierge and activity desks

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Expedia’s value proposition


Expedia provides access to international demand

•Highest brand awareness

worldwide

•Leadership position in nearly

every geographic market

present

•3 of top 7 online travel agencies

in the Americas, including the

#1 agency

•#1 in UK, Germany, Italy; #2 in

France

•#2 in China

•More points of sale to be

launched


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Expanding internationally

© 2007 Expedia. Confidential and proprietary. All rights reserved. Expedia Partner Services Group |7

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#1 online travel site

20 POS

Broadest product offering

focusing on “the whole trip”

Package-focused

Broad, upscale customer

mix

Longer booking

window/longer LOS

#1 hotel specialist

40 POS

Consumer site focused on

user reviews

Two-thirds drive

Last-minute shoppers

Call center heavy

Hotel Only

Wider and specific

distribution

Hotel/Package ► longer

length of stay

Some of our partners:

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Reaching diverse customer segments


Multiple product categories to maximise demand

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More than 730,000

flight shoppers

globally, per day

More than 55,000

car shoppers

globally, per day

Nearly 475,000

hotel shoppers

globally, per day

We have more than 75 million visitors to our sites every month


5.5% overlap

Accessing different target audiences

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We attract a range of consumers with different buying habits

UK Traffic per month

20 Million

UK Traffic per month

40 Million

Average Customer Age: 56% are 25-44

Income: 41% earn £50+

20% repeat customers

Average Customer Age: 63% are 35-65

Income: 67% earn £50+

20% repeat customers


AGENDA










We are bringing you the world

WHY work with an OLTA?

Incremental business: Reach travelers that would not find you any other way

Get customers that stay for longer in your hotel and spend more money on it

Inspire travelers to find, buildand share travel experiences

Make your hotel accessible to a Worldwide audience

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Trends in Travel Distribution Europe online travel continues to grow and gain market share from offline channels

European Leisure/Unmanaged Business Travel Market 2006-2010Gross Booking (€B), Growth (%) and as a Percentage of Total Travel Market

Note: 2008-2010 projectedSource: PhoCusWright´s European Online Travel Overview 4th Edition

• The European online leisure/unmanaged business travel market is projected to nearly double, from €48 billion in 2006 to €90 billion in 2010

• Online bookings in 2007 increased 24% over the previous year vs. 6% growth for the overall European travel market (€59 billion out of €237 billion total), and is expected to continue to see healthy growth over the next few years

• In comparison, the US online travel market ($90 billion out of $265 billion total) also saw growth of 12% in 2007 this is expected to slow to 7% by 2010


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Trends in Travel Distribution Lack of consolidation and economic environment favour online distribution channels• The large number of geographically dispersed small chains and independent properties are

not likely to see major consolidation, therefore the supplier direct online distribution channel is not forecasted to increase significantly in importance for Hotel

• With the economy softening, online distribution channels have increased access to inventory and can offer a broad range of products for easy comparison shopping by consumers who are increasingly value conscious

European Supplier Web Site Booking ShareLeisure/Unmanaged Business

Note: 2008-2010 projectedSource: The European Online Travel Market: 2006-2010

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Trends in Travel Distribution Despite the economic environment, online travel will continue to grow• The negative macro economic outlook, driven by the global financial crisis, is expected to

have a negative impact on European travel spend• However, an economic downturn is expected to have an upside for online travel – just as

it already has in the US, where travelers are increasingly shopping for bargains online • After September 11th, 2001, Expedia hotel transactions grew 120% in 2002

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IMPRESSIONSIMPRESSIONS

• 7,743,507 – £154,8707,743,507 – £154,870

•4,222,803 – £84,4564,222,803 – £84,456

• 2,337,650 – £46,7532,337,650 – £46,753

Cost of a banner such as the one displayed above is approximately £20 per 1,000 impressions

The cost of Top 5 position head term on a major search engine such as ‘London Hotels’ is estimated at £1.15 per click

PLACEMENTPLACEMENT

• Top Hotel Top Hotel

• AverageAverage

• Low Low

CLICKSCLICKS

•130,874 - £150,505130,874 - £150,505

•62,713 – £72,12062,713 – £72,120

•42,786 - £49,20342,786 - £49,203

Trends in Travel Distribution Participating with an online travel agent provides media value


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• For every 2 transactions on Expedia, our shoppers also make 1 transactions direct with you

• Resulting in significant reduction of the effective cost per transaction on Expedia

We help drive your growth

Cost per transaction spread

over 3 transactions

25%

15%

Direct cost per transaction Effective cost per transaction including “Billboard Effect”

Driving direct sales


AGENDA










1. Get your product into OLTA Shelves

+ 2. Promote deals on OLTA shelves

+3. Run ad campaigns with OLTA’s

+ 4. Be active on UGC sites

+ 5. Upgrade your site for ancillary revenues

Co

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Rel

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Long-term Brand Value

5-STEP EVOLUTIONARY ON-LINE MARKETING – Partnering with Online Travel Agents (OLTA’s)

OLTA capturing demand th

rough Marketin

g Investm

ent


1. Get Your Product on OLTA Shelves Online distribution provides flexible options for both consumers and suppliers


Info sitesTraveller Reviews

Virtual Tours

Room details

Photos

1. Content Management

95% of leisure Bookers & 92% of Lookers say descriptive content is important to them


2. Promote Deals on OLTA Shelves


3. Run ad campaigns and build your brand


The Web Site Content That Matters To TravelersForester Research

4. The Power of User Generated Content

• Expedia has more than 1.5 million traveller reviews in 9 languages

• 14.5% of customers posted reviews globally


Hotel Conversion vs User rating Score (1-5)

1–2.9 3.0–3.9 4.0–5.0

% User Ratings

100

170

220

% Total ratings

Conversion Index

Source: NYC, Hotels.com, Nov 2008

4. Manage your reputation on User-generated content sites, it will help you in the long-run


4. Manage your reputation globally


5. Upgrade your site for ancillary revenues

Expedia – Pegasus co-branded hotel partnership will help Pegasus expand its consumer offering with minimal investment


$1 billion in marketing spend in 2008• We drive demand through investing in a wide range of marketing channels


Content

Telesales Agents

Search Optimization

Promotions

Email marketing

Merchandising

Full service online travel agency……more than just a transactional website

Offline Advertising


Expedia Inc in Ireland

Strong YoY growth in domestic searches and transactions – The Irish seems to be staying closer to home this year


• Despite the weakening macro economics, 21% room night growth was achieved in Dublin in 2008

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New Distribution ChannelsExpedia has been achieving significant growth into Dublin

YOY Growth

* Compared against same period last year

Booked Nights by Expedia’s Customers and Year-on Year Growth in Dublin for 2002 to 2008

76%47%

43%25%

25%

21%

2002 2003 2004 2005 2006 2007 2008


• Expedia’s customer base is becoming increasingly diverse internationally and the large European markets continue to grow.

• In particular shift towards customers coming from Scandinavia, France and Spain

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New Nationalities Visiting DublinExpedia’s significant and growing international reach

Booked Nights in Dublin for 2006 to 2008 Origin Mix of Expedia and Hotels.com Customers

0%

20%

40%

60%

80%

100%

2006 2007 2008

Other

Ireland

Netherlands

Germany

Spain

Nordic

Italy

France

North America

UK


Recap

Who will win in this economic environment?

The travel suppliers who will win will be those who:

Display rich content

Actively manage rates and inventory

Take advantage of marketing and merchandising opportunities

Provide a quality product

Offer excellent service


Final Words: The ‘right’ Mindset ... can help you make the right decisions

Be curious and open minded

Look cross-industry

Try ‘stuff’ out

Test, Optimise and Adapt

Thank you and

Hope to see you online!


Summary

1) Despite the economic downturn, online travel will continue to grow and gain market share from offline channels

2) Global Intermediaries will have a bigger role in the distribution of the hotel product due to the fragmented lodging landscape

3) The negative macro economic situation means that new distribution channels with pan European and global reach will become more important than ever

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