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Presentation on Distribution by Ross Kata, Expedia at the E-Tourism Africa Summit 2010

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  • Looking at the US and Global economies seem to be getting back on their feet, with the US GDP growth coming in at 3.5% in Q3 and China grow at almost 9%. I would caution, however, that much of the growth that we are seeing is the result of unprecedented stimulus spending from governments all over the world, and relative strength this year versus an economy and consumption which hit the wall as a result of systematic instability and broad based panic last year. At some point the stimulus has to slow, the consumer has to stand on his and her own two feet, and governments have to start to pay back their borrowings. These are not ingredients for a strong recovery. Odds are that the next five years will be challenging and most growth will come from gaining market share rather then a rising tides of economic growth. This will require the hospitality industry in Southern Africa to execute more effectively and innovate faster then competitor destinations. While we have a difficult path ahead of us I have never been more confident of the ability of the tourism sector to expand its current position and grow its economic importance in the region.
  • We are the fourth largest online retailer Our systems are built for scale
  • We are the fourth largest online retailer Our systems are built for scale
  • Distribution Globale: vous etes present dans le monde entier, de la france a la chine, des etats unis a l’australie, du japon a l’afrique de sud. Revenue Management, Visibilité… Present sur de nbreux sites a travers le monde Expedia 13 pages today .com, .ca, .co.uk, .fr, .de, .nl, .it, .es, .com.au, co.jp, .sw, . da, .ng more to come h.com , 30 sites a travers le monde
  • 4 Star hotels offering deep discounts vs. 3 Star properties gain market share. 5 Star maintain market share.
  • Looking at the US and Global economies seem to be getting back on their feet, with the US GDP growth coming in at 3.5% in Q3 and China grow at almost 9%. I would caution, however, that much of the growth that we are seeing is the result of unprecedented stimulus spending from governments all over the world, and relative strength this year versus an economy and consumption which hit the wall as a result of systematic instability and broad based panic last year. At some point the stimulus has to slow, the consumer has to stand on his and her own two feet, and governments have to start to pay back their borrowings. These are not ingredients for a strong recovery. Odds are that the next five years will be challenging and most growth will come from gaining market share rather then a rising tides of economic growth. This will require the hospitality industry in Southern Africa to execute more effectively and innovate faster then competitor destinations. While we have a difficult path ahead of us I have never been more confident of the ability of the tourism sector to expand its current position and grow its economic importance in the region.
  • Looking at the US and Global economies seem to be getting back on their feet, with the US GDP growth coming in at 3.5% in Q3 and China grow at almost 9%. I would caution, however, that much of the growth that we are seeing is the result of unprecedented stimulus spending from governments all over the world, and relative strength this year versus an economy and consumption which hit the wall as a result of systematic instability and broad based panic last year. At some point the stimulus has to slow, the consumer has to stand on his and her own two feet, and governments have to start to pay back their borrowings. These are not ingredients for a strong recovery. Odds are that the next five years will be challenging and most growth will come from gaining market share rather then a rising tides of economic growth. This will require the hospitality industry in Southern Africa to execute more effectively and innovate faster then competitor destinations. While we have a difficult path ahead of us I have never been more confident of the ability of the tourism sector to expand its current position and grow its economic importance in the region.
  • Expedia

    1. 1. Effect of Internet on Travel Ross Kata – Expedia Africa - JNB Office
    2. 2. Travel Agents need to evolve with consumers
    3. 3. Summary of Traffic to Travel Categories
    4. 4. Where are they looking Billboard Effect
    5. 5. Purchase Channel By Age – Winning the hearts and minds Building Bands
    6. 6. Effects of the internet on consumers
    7. 7. European Bookings by Segment OTA’s over take Airlines 2011
    8. 8. Hotel Shopping – Top 5 sites Europe
    9. 9. How are they booking 2009 Global Performance by Travel Industry 2009
    10. 10. Effects of the internet on intermediaries <ul><li>Traditional travel agents : value added / mix model / less transactional more experiential. Need to become customer focused </li></ul><ul><li>Wholesalers and traditional tour operators : direct to consumers / large investments in technology and marketing. Giants moving online. </li></ul><ul><li>Online travel agencies : Battle to win hearts and minds of consumers and suppliers </li></ul><ul><ul><ul><li>Better functionality for consumers </li></ul></ul></ul><ul><ul><ul><li>Improved tools for suppliers </li></ul></ul></ul><ul><ul><ul><li>Alternative compensation models (transaccional & media), for suppliers </li></ul></ul></ul><ul><li>Collapse of the Middle – Currently taking place with airline consolidation. KLM & Air France and BA & Iberia. More to come!!! </li></ul>
    11. 11. Connectivity No longer the future Email booking or phone booking entered into software nightsbridge Info sent to websites Guests make booking email sms Email to guests Booking into software
    12. 12. Integration to major Portals, such as Expedia.com Web-based Central Reservations software for a multi-property view of all your rates and inventory Powerful Revenue and Yield Management Optimise RevPar – ‘Revenue per available room’ Integration to Call Centre, Website, ADS and GDS e R es® CRS & Distribution Hub
    13. 14. Effects of the internet on travel suppliers <ul><li>World wide distribution and marketing </li></ul><ul><li>Access to mountains of information </li></ul><ul><li>Flexibility </li></ul><ul><li>Control and real time decision making </li></ul><ul><li>Revenue Management </li></ul><ul><li>Consumer is now ‘Pro - sumer’ </li></ul>
    14. 15. Global ADR - Hotel Source: Expedia Inc Booked data
    15. 16. Expedia’s Mission Work with our partners to secure the highest quality supply Match supply and demand as intelligently as possible Inspire travelers to find, build, and share travel experiences Increase access to global traveler demand Our mission is to build the world's largest and most intelligent travel marketplace
    16. 17. Expedia General Figures <ul><li>$23bn sold in travel in the last 12 month #1 online travel company </li></ul><ul><li>Around 75 million people visit our sites every month. </li></ul><ul><li>75% of the people buying their holidays online visit one of our sites at least once before buying. Value and billboard effect. </li></ul><ul><li>14 million hotel searches are made every day in Expedia sites. </li></ul><ul><li>1.6 rooms are sold every second, an average of 140.000 rooms are sold per day at Expedia </li></ul><ul><li>Over 360 000 room nights & $60m sold into Eastern & Southern Africa. </li></ul>We fill 150 Boeing 747’s every day! We land more than 130 paxs a day just in JNB If we put in line all the beds we sold in E&S Africa we could have built a double hightway from Cape Town to Cairo
    17. 18. Expedia Travel – From MSN to the World Expedia holds a leadership position in nearly every market where we are present We build leading brands that are highly relevant to our partners No.1 hotel specialist, in 54 countries Leading discount travel site reaching price-conscious travelers Leading online travel service provider in China Corporate travel agency operating in 9 countries No.1 community player with more than 22M reviews and opinions No.1 OLTA, in 19 countries Operating more than 100 in-market concierge and activity desks
    18. 19. <ul><ul><li>One Extranet, one contract and your hotel is seen and sold worldwide </li></ul></ul><ul><ul><li>No partner can offer you such valuable exposure at ZERO fix cost </li></ul></ul><ul><ul><li> does! </li></ul></ul>Expedia – The Power of the Global Distribution
    19. 20. Content management 95% of US leisure Bookers and 92% of Lookers say descriptive content is important to them. The Web Site Content That Matters To Travelers, Forester research
    20. 21. Provide excellent service The Web Site Content That Matters To Travelers Forester Research
    21. 22. US Offline Campaign <ul><li>SMART campaign highlights Welcomerewards benefits </li></ul><ul><li>Link to SMART Offline Ad Campaign </li></ul><ul><li>Viral Campaign  </li></ul><ul><li>http://www.youtube.com/watch?v=KMWBXAJ7NIc </li></ul>
    22. 23. EMEA Offline Campaign <ul><li>London outdoor campaign and Nordic offline ads promote deals </li></ul><ul><li>Link to creative </li></ul><ul><ul><li>Digital LCD Screen </li></ul></ul><ul><ul><li>http://delorean.se/visafilm/?film=Hcom_NO_WRP_SALE_Sept09_V3.flv </li></ul></ul><ul><ul><li>http://delorean.se/visafilm/?film=Hcom_NO_Blue_SALE_Sept09_V3.flv </li></ul></ul>
    23. 24. Japan Online Campaigns <ul><li>Online banner ads promote deals </li></ul>
    24. 25. Brazil Offline Campaign <ul><li>Hoteis.com print ads highlight the advantages of our size </li></ul>
    25. 26. In-store advertising with Expedia – No more Spray and Pray
    26. 27. The Destination Growth Model – Creating a profitable solution
    27. 28. Some of our partners…
    28. 29. Fuelling Growth with Tourism Boards
    29. 30. We deliver partnerships offline too…
    30. 31. Fuelling Growth Tourism Boards Case Study: South African Tourism Campaign 28 Feb – 31 May 09
    31. 32. What is the Billboard Effect? Exposure on Expedia.com Direct bookings on Expedia Visitation to Partner Site Bookings on Partner Site
    32. 33. The Consumer Purchase Funnel <ul><li>Expedia reaches the consumer in various stages of the purchase funnel, most importantly right before the actual purchase. </li></ul>All of these have some value as they reach the consumer throughout the purchase funnel. New Attribution Method AOL Travel/Google Search/Yahoo! Search Supplier Site/Other OTAs /Destination Site or Supplier Site
    33. 34. Billboard effect Results – Cornell University Increase in Room Nights Booked
    34. 35. Numbers for East & Southern Africa
    35. 36. Expedia Inc – Where room nights are coming from
    36. 37. Focus on Southern Africa - Air Source: Expedia Inc Booked data
    37. 38. Focus on Southern Africa – Air Ticket Sales - 2008 & 2009 - Euro to Southern Africa Source: Expedia Inc Booked data
    38. 39. -12% Q3 Focus Africa - ADR 2008 vs. 2009 Source: Expedia Inc Booked data
    39. 40. Focus Africa Booking window vs. ADR
    40. 41. Booking window patterns are shifting Case Study: Cape Town 27% Source: Expedia Inc Booked data
    41. 42. Product selection: Star Rating YoY ADR 4 Stars Up 7 %
    42. 43. Room Nights to South Africa 2002 – 2009 YTD
    43. 44. Point of Sale to South Africa
    44. 45. East Africa RNS 2004 – 2009 32 000 RNS to East Africa $6 Million Room Revenue Organic Growth Phase
    45. 46. Where travelers are going - Southern Africa Rank of Africa destinations 2008 vs. 2009 by city 36 Source: Expedia Inc Booked data 114 208 129 109 168 City Rank 2008 Rank 2009 Cape Town 116 80 Johannesburg 345 231 Durban 597 429 Dar es Salaam 580 451 Nairobi 619 411 Accra 634 525 Moved up in rank
    46. 47. Expedia Hotel Partner current & future <ul><li>If you are not working with Expedia you are not visible. </li></ul><ul><li>There is a media & transactional partnership </li></ul><ul><li>All room types. </li></ul><ul><li>All meal plans. </li></ul><ul><li>Hotel Description & Pictures. </li></ul><ul><li>Promotions for next 18 months </li></ul><ul><li>2011 Rates </li></ul><ul><li>Be proactive !!! Easter 2009 promotions still available. </li></ul>
    47. 48. Anyone can join – www.ian.com
    48. 49. How can agents benefit from Expedia? www.hotelsta.com
    49. 50. Summary <ul><li>Markets are showing signs of recovery with excellent growth prospects throughout CES Africa </li></ul><ul><li>Winners are going to be the hotels that execute during extreme highs and lows. Yielding is key </li></ul><ul><li>Proactive approach by Tourism organizations by being more result driven </li></ul><ul><li>This shift online is impacting consumers, intermediaries, and travel suppliers. Internet is changing the way people buy and sell travel (i.e. Cape Town is sold as a long weekend city break!!!) </li></ul><ul><li>More of the same will take us nowhere. Moving mind set from signing contracts to managing contracts. Shift from being Purchase Managing to Sale Managing </li></ul><ul><li>Wear online hat when doing business with online Tour Operators. Wear offline hat while doing business with offline tour operators. Flexibility of rates. </li></ul><ul><li>Expedia is your best option to maximize revenue, reach worldwide audience, learn about e-commerce and benefit from our vast online experience. </li></ul><ul><li>We are moving into all areas of Africa. Be the first not the last to join us and benefit from doing business online. </li></ul>
    50. 51. Thank You & Questions ? [email_address] www.joinexpedia.com

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