AT Expedia Explore this week, CEO Peter Kern spoke to me about the moose, his spirit animal; his “zero doubt” that travel will be back; the pain Expedia has gone through to simplify and focus; and his growth mindset despite being labelled “Mr Restructuring”.
Peter Kern, CEO of Expedia Group, is looking forward to the “rebirth” of the travel industry next year and he called on partners to hang on in there because “we are going to get through it together”.
Speaking at Explore 20, its partners conference which is usually held in Las Vegas but went virtual this year, he said, “People want to be travelling, we are all miserable because we don’t know when we can go out and do things. Yes, some of us can travel locally which is good because it’s like a release from captivity.
“For us, the question is how do we make it possible for people? We are not in coal-mining or cars, we are in travel for a reason, we bring joy to people. It’s hard for us, hard for people but we will get through it if we help everyone.
“Humanity has a need to travel. I have zero doubt travel will be back. We just have to weather the storm and support each other.”
Turning to the moose for guidance, fresh eyes has helped
Interviewing him this morning, I can sense Kern chafing at the reins to be free. He is after all big on nature and open space. What’s kept him sane is spending his time in his home in Wyoming where a moose occasionally strays onto his front yard.
Coming from Singapore, where we don’t even have cows on the road, I simply had to ask him about the moose sighting I had seen during one of his television interviews. Turns out, the moose is Kern’s spirit animal – he calls his son “Moose” – and has become a familiar sight to his Expedia colleagues because it is usually walking across the lawn during meetings.
“It’s very common in Wyoming. You just don’t want it creeping up on you,” he told me.
Well, for sure, no one saw Covid creeping up on us. For Kern, his coming into the CEO role at this time has been an advantage. “A crisis helps you pick your battles. I bring fresh eyes, I’ve been seven to eight months in this role in earnest and it gives you latitude to make decisions that were hard before.
“There is no time for the maybes, you have to focus on what you are good at.”
He said that “in a weird way”, Covid has been a blessing. “If you want to be a change agent, it gives you an opportunity to look starkly and clearly at what’s going on and what really matters. It’s hard to do that in a regular year when you have business going on and next quarter earnings to think about. When the world stops for you, you have to take stock.”
Simplicity is key, “focus on the things you are really good at”
And there are three things Expedia Group wants to focus on and get really good at – “really understand and empower the customer, drive success of suppliers with everything we offer and to be the best travel tech platform in the world”.
“The tech and marketplace is where we are strong and we are tripling down on the tech platform. Things around the edges, that’s not our long suit, we must be brave enough to drop it.”
It is also tripling down on its data and tools to help customers optimize their business. “We have the most complete set of travel data in the world, we can help partners make the right choices, that’s the right purpose of the data.”
He cited the example of its partnerships with companies like Marriott or Intercontinental Hotels Groups where it helps these brands optimize their distribution. “It gives us an opportunity to simplify, save money, manage the marketplace better. We want to do more of these longterm. Obviously the more suppliers who go this route, the more we will have a healthier ecosystem. It helps them, helps us.”
For immediate help, it implemented its Revive and Relief programme in 170 countries in which it went to hotel partners with insights, marketing funds and delayed payment terms. Kern said those who participated saw a 20% increase in bookings relative to those who did not participate. “We are doing everything we can think of to help everybody.”
Of course, it’s had to help itself first and has had to make painful cuts to the business and team throughout the year. In late October, it announced a third round of job cuts, this time to its Travel Partners Group.
Spokesperson Josh deBerge said in a statement to Puget Sound Business Journal: “Earlier this year, Expedia Group announced plans to streamline and reshape our business for the long-term future. At the same time, like all travel companies, we suffered a major reduction in bookings following the onset of Covid-19.
“While we have worked hard to save jobs, the proposed changes announced this week in our Travel Partners Group are a continuation of our efforts to streamline as we re-focus on creating the most value for our customers and partners while adjusting to the foreseeable realities of the travel market,” he added.
Not just “Mr Restructuring”, “I have a growth mindset”
During my interview with Kern, when I asked him what was the most misunderstood thing about him, he said these cuts have made it easy for people to label him as “Mr Restructuring” but he stressed, “I have a growth mindset. Cutting costs is not fun, but I am about growth.”
For now, growth is definitely coming from its Vrbo brand whose earnings helped lift its third quarter results. “We are lucky, anyone in vacation rentals got lucky. Vrbo is all about the whole home experience and that’s attractive during Covid. I have vacationed like this for a whole decade and this is a clear lane for us, pushing the family experience, whatever your family is.”
It is pursuing new growth by pivoting Orbitz, the brand it bought in 2015 for $1.6b in cash, to serve “underserved” travellers, specifically the LBGTQ market. Kern’s commitment to diversity and inclusion issues was shared in public when a letter he wrote to employees was shared, after the US elections when the Biden-Harris ticket won. In his letter, he wrote, …“regardless of your political affiliation, there is no denying that the prospect of our nation’s first woman, first African American, and first South Asian American in the Vice Presidency is a huge step towards equality in our country”.
“2020 was not only the year of the pandemic but a lot of things also became more obvious, such as inequality, and I felt compelled to comment frequently.
“As a company, we have a lot more to do for diversity and inclusion – for staff, customers and industry, a long long way to go but we have very definite plans, one being how to service underserved travellers.
“With Orbitz, we have taken the opportunity to do deep in a specific group, and offer LBGTQ-oriented content to help those travellers travel safely, easily and successfully. We want to do this more broadly as well and help all underserved travellers.”
Travel, leisure and business, will “keep on trucking”
As with everyone else, Kern is more bullish (I am tempted to say, moosish) about leisure travel “because we are all dying to travel” than he is about corporate travel “which is driven by policy” but he’s not as pessimistic as Bill Gates, whose recent predictions that 50% of business travel will not return and 30% of work days will be lost from the office have been making the rounds.
“We all believe corporate will take a while and we don’t know whether the new normal will look like normal but people are going to start travelling and when the people who start travelling start booking business, others will start,” he said.
He said that during the lockdown, smaller hotel chains that cater to the middle market in the US were doing well because truck drivers were driving around, doing deliveries. “There’s a whole bunch of things that keep on trucking.”
More uncertain will be internal travel as well as how flexible work will change. “We are all wrestling with what that looks like. But I don’t think we will be at 50%.”
Kern believes that everyone has got the travel bug “and anyone who doesn’t hasn’t travelled”. Back to his faith that travel will be back, he said this pandemic has reminded everyone that if you strip everything away, even the technology, it’s been all about people helping people.
“Sometimes we can lose sight of the people in business, with our numbers, charts and graphs. Covid has reminded us. We have suffering travellers, suffering suppliers. It’s people supporting each other and we do that for that reason.”
After the interview, I did some homework on the moose and I learnt that they are part of the deer family, they can grow really big (the average male can grow up to 400kg, that means it would take eight of me to equal one moose), they are powerful swimmers and a calf can outrun a human when it is but five days old.
Well, Expedia is certainly no moose now in weight, it’s shed a lot this year. Let’s hope this helps it out-run and out-swim everyone to hasten the “rebirth” of travel in 2021.