Expedia Pricing Tactics Powered By AI and Reams of Data, Says CEO

Jun 23

“We sit on reams of data with 750 million visits to Expedia Group properties every single month,” says Expedia CEO Mark Okerstrom. “That just gives us an incredible amount of understanding around what travelers are looking for, how we can tailor our search results, how we can tailor the recommendations we give, the advertising that we show, and that’s just the beginning. We’re also using AI to help inform some of our lodging partners with pricing tactics, to help them price more effectively both in the alternative accommodation space and in the traditional lodging space.”

Mark Okerstrom, CEO of Expedia, discusses how the online travel giant is using data and AI to power its pricing tactics in an interview on Bloomberg Technology:

We’ve Always Been At the Forefront of Travel

We’ve always been at the forefront of travel. We’ve been at this for 20 years. The one thing that has been consistent for 20 years yeah is this is an incredibly competitive industry. Despite all of the competitive forces that have acted on us, Expedia last year did a $100 billion dollars of bookings, multiples of the size of Airbnb and many of these players out there. We’ve got thousands and thousands of the top engineers and data scientists and product minds in the world focused on travel. That’s how we stay ahead.

VRBO has been around for a very long time. If you go back in time, people used to talk about getting a VRBO for the weekend. It was the noun. s we went through and did a ton of research here in the US and also internationally about all of the different names we could call the new VRBO, VRBO was the one that actually resonated the most. So we decided to put all of our effort behind that brand. We’re pretty excited about rolling out globally in the coming years.

M&A is always part of our playbook, so I would never say never (regarding more acquisitions). But we’re pretty happy with what we’ve got in alternative accommodations and we’re pretty excited about putting all our efforts behind VRBO.

Global Travel Industry Generally Looks Pretty Healthy

So far so good (regarding tariff impacts). It looks like a healthy travel environment to us. Recent research done by Expedia here in the US is 85 percent of people are planning on taking a trip this summer and 15  percent were for budget constraints. This is broadly consistent with what we’ve seen. Americans are traveling. The global travel industry generally looks pretty healthy. We’re fortunate that we are a global business.

In good times and bad times we definitely see shifts in travel patterns but people often just take their trips. It’s like the last thing they cut. Maybe they’ll take a trip a little bit closer to home, they won’t take that trip overseas, but they travel. If you look at our results over the 2008-2009 period, for example, those were some of our strongest years.

Expedia Pricing Tactics Powered By AI and Reams of Data

We sit on reams of data with 750 million visits to Expedia Group properties every single month. That just gives us an incredible amount of understanding around what travelers are looking for, how we can tailor our search results, how we can tailor the recommendations we give, the advertising that we show, and that’s just the beginning. We’re also using AI to help inform some of our lodging partners with pricing tactics, to help them price more effectively both in the alternative accommodation space and in the traditional lodging space. Honestly, we’re just getting started.

We’ve been doing the one-stop shop before it was cool. We’ve been doing it for 20 years. Not only are we about search but we’re also about booking and taking care of people during the trip. No one else can do it.

Expedia Pricing Tactics Powered By AI and Reams of Data, Says CEO Mark Okerstrom

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