Expedia CEO considers Airbnb ‘one-dimensional’ – Skift
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Expedia Group CEO Peter Kern, who has been busy reshaping his vast company for the past two years, doubts Booking.com’s connected travel strategy, thinks Airbnb’s use case is “One-dimensional” and claims that Expedia has more potential than that of Expedia. both.
“We’re like a great athlete where the benefits are huge,” Kern told Skift in a phone interview to discuss some things that might be topics at the Skift Global Forum in September. “And Booking is like working on the tip of a pen. We are improving a little each time, but they are already very good. They don’t have as many advantages in my opinion.
Kern argued that the CEOs of these rival companies are more promotional than his style and sell the stories of their respective companies. Of course, we’re sure that at Airbnb’s headquarters in San Francisco and the Booking Holdings head office in Norwalk, Connecticut, there would be a lot of disagreements.
“Airbnb is interesting, but it’s still a one-dimensional use case. Kern said, “Well, I have no doubt that (Airbnb CEO) Brian (Chesky) thinks that no one will ever stay in a hotel again and that everyone will stay in little cabins in the woods forever. . I think deep in his heart he can’t believe we’re not all coming back to Paris. And the majority of us still don’t stay in hotels.
Join us at the Skift Global Forum in New York September 21-23 and hear from Peter Kern, CEO of Expedia Group
Kern discussed these and other issues, such as Vrbo’s strategy and Expedia’s business-to-business push, in the following Skift interview, which was edited.
Skift: So I have a funny question: who scares you the most on Airbnb or Booking.com? And why? And can we also get your take on the Airbnb earnings call where CEO Brian Chesky said Airbnb is leading the travel recovery, and they are the best position to lead the recovery due to the nature? changing travel. So you’re okay with all of this, right?
Peter Kern: Absoutely. Brian is never wrong. I mean, just ask him. No, listen, I have total respect for Brian and for (CEO of Booking Holdings) Glenn (Fogel). I think they’re both a bit more promotional than me. If you’ve been listening to our call (on earnings) you need to talk about the good stuff, but I won’t be afraid of the bad either. I think everyone felt a bit more like they were selling a story.
But listen, I think, I would say, they both scare me and either scare me in the sense that they are formidable competitors. They each have their advantages. Bookings has the perfect tactical weapon. They’re really good at what they do, performance marketing, promotional stuff, that’s their super power. Airbnb has a big brand and a unique space. Lots of that nice direct traffic, which is good for them.
And they have stocks and things and places some of us don’t. So that’s an advantage. Our advantages are that we serve everything. I mean, as I keep joking with our team, who might mention Booking’s connected travel. I always say, ‘You mean a trip?’ Come on, a trip is a trip. What is connected travel? So I think we have a much broader and more strategic potential. I think each of them is really particularly good in their own space. But we cover a large space for ourselves, that is, we serve everything. We go everywhere. We are really strong in certain categories, international travel. We’re stronger in the air than anyone by a mile. These are all opportunities for us.
And we have, as I said, the only investor. We are like a great athlete with enormous potential. And Bookings is like working on the tip of a pen. We are improving a little each time, but they are already very good. They don’t have as many advantages in my opinion.
And Airbnb is interesting, but it’s still a one-dimensional use case. Well, I have no doubt that Brian thinks that no one is ever going to stay in a hotel again and that everyone is going to stay in little cabins in the woods forever. I think deep in his heart he can’t believe we’re not all coming back to Paris. And the majority of us still don’t stay in hotels.
So I think it serves as a story for him. And I think more people were able to use the alternatives and it’s an interesting use case. And there will also be more people who adopt it as an alternative when they travel. But we hardly think will take over the world. And I think we’re going to fight them both. I mean, in the swamp we’re going to be leading the fight, but we each have a place to go.
Our place is that we think we have a lot more advantage on the consumer side, on the brand side, on the sticky side, on the total product side, by offering nut soup and everything. And we have a huge opportunity in the B2B (business to business) space. And not the same for these guys.
And I think the pie will widen as well. So we don’t have to fight for the last reservation.
Skift: On Vrbo, where are things today in terms of competition with Airbnb? So you talked about targeting markets where you think there are opportunities. An update on this? And then there’s also the fact that Vrbo doesn’t have a full-time CEO. So, doesn’t Vrbo deserve a full-time CEO or chairman?
Kern: Neither does Hotels.com deserve one or Expedia.com deserves it. I mean, that’s what got us to where we were. Now, do they deserve teams focused on their particular use cases, and their brands…? Does this need to be coordinated at a high level with our new brand manager and his team in terms of how they work together, how they fit together, how they compete or not? Yes. I think they can’t just live in isolation, just settle down and compete with each other.
This is what put us in a position where we were before. We believe they can be more useful by working together in an ecosystem that makes sense. And when it comes to having a CEO, it doesn’t lack intention, capital, willpower, whatever we could put behind Vrbo and the opportunities that Vrbo has. But they are not necessarily separate from the whole company.
But what about the opportunity to drive vacation rentals through our B2B (business-to-business partners? It’s a great opportunity. It’s not about Vrbo being a stand-alone thing. It’s about This is Vrbo being part of our ecosystem. What about vacation rentals or through OTAs (online travel agencies)? Again, this is part of our ecosystem. So they love the unique, can I just drive my one brand and my only use case across the world. I think our advantage… Look, Airbnb has this. They ‘gonna run with that. That’s good. Our advantage is that we serve everything and we can serve everything. And we have to use our advantage and our star advantage, but the others are playing their own games. So I don’t think who owns it or drives it, it doesn’t lack attention , it does not lack intention.
We will stick to our knitting, stick to the whole house… We are less concentrated in the big cities. And as things open up, it will help Airbnb more than it helps us, recreation and the beach, and other things have helped us more, but we can stick to it. And we think people will continue to look at these uses over time. And we’re going to be aggressive and continue to lead our business where we think it can grow.
Skift: I have a friend who is Airbnb superhost in Ireland, and she says to me, what happened with that Vrbo incentive program that you rolled out in the US for Airbnb superhosts? Youn blows a frightening opportunity. People are dying to join Vrbo in Europe and it just isn’t happening. So where is it? And what has been your take on how this program has gone so far?
Kern: Well I think the program has been a huge success. And I have to admit we were going where the money was, which is the US travel market rebounded a lot earlier, a lot bigger, and had a lot more focus and supply issues on the Vrbo market. So we were very focused on, we know that if we can unlock more supply, there is massive demand. I think in Europe the demand has been good, but not as strong and not quite in the same way where we felt a squeeze and we couldn’t meet the needs. But this is a perfectly correct point. And we’ll continue to use our best games in all markets where it makes sense.
Skift: So, are some European markets arriving in terms of an incentive program?
Kern: I’m sure our plan is to use it more widely. I mean, honestly, we went from a broad acquisition strategy to Covid without an acquisition strategy. And then we focused on the squeezed markets. And now you’ll see us still expanding, I think, and going everywhere with our best programs to bring the right kinds of content to the platform. So I’m sure you will see this in other parts of the world.
Skift: So, how is your new focus on B2B different from how Expedia has approached it in the past?
Peter Kern: Well I think the main difference is that in the past we built our rigs and had a lot to ourselves. And then we saw the business opportunity to help other people. And we started to rely on these platforms to set them up primarily for trading partners. And we’ve built a great business out of it.
But I think when we started looking at whether to consolidate into one technical platform, build in a new way, and build everything for multiple tenants and be outsourced on both, it gives us the opportunity to expand the pie, then a greater opportunity to help more partners.
And now we come to a place where you can have it all. You can have little pieces, you can have multiple pieces. And we can give it to you in a way that allows people to do a lot more and use exactly what they need. And don’t run into those circumstances where we built it for these big partner companies, but it doesn’t work for the small partners, or it doesn’t work for the developers or whatever. So this is the real opportunity that sort of aligns with our plan on the technical stack. And that allows us to be much more flexible for many more partners in the future.
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Photo credit: Peter Kern, CEO of Expedia Group, believes his company has more potential than Booking.com and Airbnb. Expedia Group