Best deals for 2014? Travel insiders tell all
As the hypercompetitive digital travel landscape continues to rev up, online travel agencies must adapt and innovate to keep their edge. USA TODAY assembled three of the industry's top executives last month to discuss how they're doing just that: Christopher Soder, CEO of Priceline.com North America; Dara Khosrowshahi, CEO of Expedia; and Barney Harford, CEO of Orbitz Worldwide.
The hour-long event was moderated by USA TODAY's Veronica Gould Stoddart. The text has been edited for clarity and length.
USA TODAY: It is common for consumers to use an online travel agency (OTA) or meta-search site to find deals and then go to the supplier to book it. Why should travelers book with you?
Khosrowshahi: For us, it is simplicity and ease of use and speed. The online travel agencies have delivered that over the years. Now, as they are going mobile, we're delivering it across platforms.
Soder: That's right. If you put the consumer first and deliver an easy, simple-to-use process, it is less likely to make sense to go elsewhere. For Priceline, we have unique products like Express Deals and Name-Your-Own-Price as a way customers can save.
Harford: There are great reasons to use an OTA as an independent intermediary who is out for your best interests. Through Orbitz.com you get to earn the currency we create, Orbucks, and still get credit card points, hotel and airline loyalty points, as well.
USA TODAY: Travelers who use an OTA to research travel have dropped to 58% from 66% in 2010. What are you doing to counteract that?
Soder: We have more people coming to Priceline than we had the year before and the year before that. So, while there may be more choices, I don't view that as a bad thing.
Khosrowshahi: This is a rapidly expanding pie, the travel business, and the online travel business, even faster than that. All OTAs are growing in volume and audience. We grew our room nights 20% on a year-end basis.
Harford: One of the big dislocating things going on now is mobile, and all the OTAs are doing such cutting-edge stuff and making it easier for consumers.
USA TODAY: With all the options, people can be frustrated with the time and effort to book a trip. How are you improving the process?
Harford: We're streamlining, so you can be on your iPhone and book a hotel literally in 60 seconds walking down the street. We're also using a huge amount of analytics and testing to get feedback on what works and what doesn't. It has dramatically simplified the customer's experience.
Soder: Booking on Priceline has become much easier (especially on) mobile. A recent innovation was the addition of Google Wallet, so somebody can very easily check out on their phone without having to enter all their information if they already have that in Google Wallet.
Khosrowshahi: We're focused on Expedia Labs where we watch how consumers book travel. We try to take their offline behavior and replicate that online. One example we observed was when consumers are researching, they see a price or a destination, they write it down on their little pad. So we built a feature called Scratchpad where we record all of your searches. It allows you to share and track your Scratchpad.
USA TODAY: Priceline just launched a new feature on your iPad app, right?
Soder: The Explorer. Right. It tries to simplify the ability for someone who doesn't necessarily know where they want to go but has an idea of the type of vacation they want to look at the options.
USA TODAY: How are you personalizing your offerings? I read that Expedia has 170 different versions of the site.
Khosrowshahi: We constantly have different versions that are battling it out. Consumers vote with their clicks, and the site that gets the most clicks wins.
Another area is sort. We look at if you are traveling midweek, end of week, with family, etc., and we will personalize that sort for you. With 240,000 hotels available worldwide, we want to make finding the right hotel for you easy, and we use consumer and personal data to do that.
USA TODAY: What would be the incentive for a user to give you more personal data?
Khosrowshahi: We could give you the right choices. We will keep all of your data absolutely private, 100%. But there is a lot we can observe based on the hotels you click on and book. So an advantage all the OTAs have is we have the greatest amount of data.
We will also use information from other consumers to help you make choices (such as) the hotels with the best guest ratings, how many consumers are searching for hotels in this particular location, or how many are looking at this particular hotel.
Soder: The personal data is really about preferences. One of our big contact points is through e-mail. The people who opted in to receive e-mails about deals or specials, we can give information that is much more relevant.
Harford: We have been testing some really cool products at Orbitz. One is you can identify up to five hotels, and based on what we have seen other customers who like those hotels do, here are the ones we recommend for you.
We also use the data to help customers understand the best values. If the price changes at the last minute, we can instantaneously tell customers that this hotel is more expensive than it usually is or more expensive than competitors or is a better deal.
USA TODAY: Expedia recently commissioned a travel study that looked at how content influenced decision making. What were the findings?
Khosrowshahi: One is user-generated content is incredibly valuable. A difference between our content and some other content is that the 11 million reviews we have on our site are verified. We sent you an e-mail and asked you to rate the hotel. We are creating an enormous neighborhood of travel enthusiasts who can give you advice on what to do.
Another area is consumers love the romance of travel, pictures, etc. So we have invested millions of dollars to upgrade the pictures we offer for hotels.
Soder: All of our reviews are also by people who actually stayed at the hotel and booked through us. In addition, we found it helpful to provide information on what is adjacent to the hotel. A lot of that is from the reviews.
Harford: We certainly believe in the role of content. We are working with Richard Bangs, who is one of the foremost adventurers, to produce video content on destinations in a partnership with PBS. It is really personal content, with Richard sitting down with a bartender in Ireland explaining how to pull the perfect pint of Guinness. We now have a great library of this content.
USA TODAY: Most Orbitz bookers have typically gone to your site for flights. How are you trying to transition them to hotels?
Harford: This is has been a major focus for almost five years. The rewards program we launched recently is designed to give customers who are going to book an airline ticket a great reason to book a hotel. The Orbucks rewards can be redeemed instantly, without any hurdles.
Khosrowshahi: At Expedia, we are actually reinvesting in our air product. We have totally revamped it and sped up air search, and we are coming out with new features: We let you know if the flight is Wi-Fi enabled. If we have two passengers, we will look for flights with two seats together.
USA TODAY:It seems the key to your business is innovation. What are you doing to stay ahead of competitors?
Khosrowshahi: One area is in mobile. An interesting new feature on the Expedia app is itinerary sharing. If I share my itinerary with you, it will show up on your Expedia app, and you will get updates on gate changes, arrival time, etc. It is updated live.
Another area is great deals, which we negotiate with hoteliers for same-day and last-minute bookings on the mobile app. They're sometimes 50% off.
Soder: Mobile has grown very fast. One example for using your phone will allow you to search for hotels near you. A lot of our mobile bookers book for check-in that night within a mile of their location. On our iPad app you can define the neighborhood by just drawing on the map and saying, "Show me hotels in this area."
Harford: We are doing a lot of innovation in the same areas. Orbitz Inside Deals has killer deals on properties that are only available for 72 hours, and we will send some of our members a heads-up about them before they go on the website. We also have destinations where we offer a promo code that is good just for 24 or 48 hours. The use of mobile for same-day bookings is huge.
USA TODAY: What do you see as the hottest destinations for the coming year?
Soder: A lot of the same stalwarts show up: San Francisco, Chicago, Boston. Some interesting ones that have arisen are Puerto Rico and the Florida Keys.
Khosrowshahi: We are seeing, especially with package deals going into Mexico, some of the popular destinations are Cancun and Playa del Carmen.