If I had to sum up the first day of Expedia Group’s Explore ’19 conference in Las Vegas today in three words, they’d be “perseverance, respect and mindfulness”.
The morning opened with a talk by Colin O’Brady who, after nine years of having his legs burnt at a beach party in Thailand, can not only walk but has also climbed mountains and trekked across the Antarctica. He spoke of learning to walk again, setting goals and never giving up.
Then former chairman of joint chiefs of staff Colin Powell shared leadership lessons from his career about trusting your teams to execute and about having respect for people you are dealing with. Referring to the trade war with China, he said that China was not a threat to the US. “I say we treat them with respect and not pick on them. They don’t fall for that.”
He spoke of how the US was built by immigrants – his father came from Jamaica in the 1920s – and how the hotel industry would not be able to function without immigrants. “Let’s never forget this.”
Then neurologist and brain health expert Dr Romie Mushtaq spoke of how stress in the workplace was detrimental to health and called for a digital detox and for all of us to practice mindfulness. “Sleep is the new status symbol,” she said, as she urged us to meditate and “turn off the blue light” before going to bed.
Trying not to fall asleep – blame it on the jetlag – I tried to connect the messages I was hearing this morning to the transformation Expedia Group is going through.
Mark Okerstrom, president and CEO, is clearly under pressure as the business faces headwinds, seen in its recent financial results and drop in stock prices. The group’s net income fell 22% year-over-year in the third quarter of 2019, and adjusted EBITDA was flat.
According to this report in Phocuswire, revenue increased 9% year-over-year to $3.56 billion, narrowly missing analyst expectations of $3.58 billion, with Okerstrom saying, “We saw incremental weakness in SEO volumes and a related shift to high-cost marketing channels”.
To turn this around, Expedia Group has to take bold moves. It’s undergone a reorganisation and its new leadership team took to the stage in the morning to declare their individual goals to get to where they need to be.
It’s realigned the business – less about brands, more about business units. It’s consolidated its tech into one global platform to support all verticals and breaking down silos internally. It’s beefing up Partner Services to become as much of a consumer giant as a B2B powerhouse, building partnerships across all industry verticals.
The fact that it held an Owners’ Summit the day before the main conference is indicative of the new emphasis it is placing on the hospitality business and the desire to engage with hotel owners from around the world. For the first time, two owners’ representatives from Asia Pacific were present – from YTL Hotels of Malaysia and CPG Hotels of New Zealand.
Its partnership with Marriott was much-talked-about and although there were no clear answers on how this will actually work and deliver on the promise of actually cleaning up wholesale rate leakage in online channels, it was agreed this was a problem that needed to be solved, even though ironically you could argue it’s the online channels which created this problem in the first place for hoteliers.
But the consensus seems to be, it’s no point fighting, let’s collaborate to grow the whole pie, said Shai Zelering, managing director, real estate, Brookfield Asset Management, which owns 410 hotels around the world and manages $14b worth of assets. “There is so much opportunity, the middle class is quadrupling in Asia, we should stop fighting,” said Zelering. “Let’s make travel better and create destinations together.”
He said his group was “focusing on non-commoditised products” right now and called on Expedia to provide tech solutions for independent groups and hotels as it does for branded groups. Zelering sits on Expedia’s Owners’ Council, a body through which Expedia clearly hopes to win the trust and respect of hotel owners.
Cyril Ranque, president, travel partner solutions, said that in the next decade, everything will be personalised for us, from medicine to travel, and that the company is making a big bet on that. “We are transforming our company to drive that change and we are in a unique position because we understand the customer beyond a single trip, but their entire life cycle.”
And who’s responsible for pulling all the tech and data together to deliver a “frictionless travel experience”? Look no further than John Kim, who’s moved from running HomeAway (now Vrbo) to president, marketplaces and platforms.
Mindful of the big task he has at hand, he said that while AI will drive the platform, “humans will power the travel experiences”. From tools such as RevPlus that hotel partners can use to recommendation engines for consumers, he said that humans should not fear automation replacing our jobs but be thankful we can be freed to do better things with our time.
And he said that two parties would benefit the most from AI – tours and activities where the information is so fragmented and complex and where decisions are made at the last minute and partners who care about the customer experience and who are not afraid of the tech and data.
As for what he personally feels could be the most interesting app that could develop from AI, he said, “Imagine a robot who loves you, never dies, knows when you need love? Someone who can read my face? How would you ever divorce from a robot?”
I felt compelled to share with him that by 2050, that day will come. Remember Professor Adrian David Cheok who spoke at WiT Singapore 2019 in October about human-robot marriages being legalized by then and how we can find love in the arms of a robot?
For now, let’s keep watch on the transformation of Expedia Group as it enters a new decade, and I catch some sleep.