The Big Trends Impacting Travel in 2023

[Music] now please welcome Global senior vice president and general manager of lodging Marketplace at Expedia group Hari Nair [Music] hey folks um thank you Hari for doing this I've always wondered what it is like to sit on these yellow chairs and I'm I'm so happy and there's a yeah the comfort for uh for a good Bollywood Duo if the if the audience is ready for it right you go ahead I'll I'll exit the stage you have a reputation to protect I probably don't I have a repetition to not dance my team will tell me we'll tell you um these chairs are not built for Comfort they're they're only Built first okay actually yeah but that's what it is well thank you for doing this yeah you and I have known each other for a bit um but I've never officially interviewed you on stage and so we're gonna do that um so you have been at Expedia this is your 20th year yes what keeps somebody at Expedia for 20 years yes I just completed 20 years last year in June you want to hear a story yeah true story um when I had worked for several years in India when I when I came here to go to grad school and it was I came here in the year 2000 and it was a really tough year to graduate because it was 2002 it was right after September 11th my world collapsed and here I was as an international student I just needed a job at the company who was going to do a Visa period for an international student um if I paid my fees in dollars I need to earn in dollars so that I can pay back my loans back in India and when the resume is going to Expedia they were looking for account managers uh my resume came back in the not interested pile so when campus day campus they were not interested in my resume so it came back as interested candidates not interested so I wasn't not interested pile and when campus interview happened I didn't go to the Xperia Booth because they had already declared they're not interested in seeing me and there was one undergraduate student who didn't show up and I was first on standby and they give me a call so it was a it was a good Learning lesson for me even even life lesson as I have interviewed and hired a lot of people in the sense that sometimes you know unless you have a role that is very specific and Technical sometimes you look for if you in generalist roles you look for True matches and there is no such thing and I'm I'm an example out here so sometimes it's a life lesson for me saying I get trapped into I'm looking for a person with a certain package and there are all kinds of individuals out there who can have great value but yes I think with Expedia what has kept me um I had three requirements for me to work for an organization one which I believe truly can influence the category of the industry you're a part of so I think Expedia fits that for me the second one is somebody who's willing to take a chance on me and I think in my last 20 years when you joined I had already spun out of Microsoft it was so you know I've seen this organization go from a startup I'm employee 2027. our employee ID so that's that's my employee number um so I've seen this company grow from a startup to what it is kind of today go through a lot of Transformations but be a part of a company who's willing to take a chance on you and as a result of that have moved different locations uh run the media side of the business for Expedia and and the online brand the B2B side b2c side and I think finally the third one is uh it's a little more personal for me it's value driven and that is look you cut me open and I'm an Indian at heart I've worked in India for many years but um what I've also seen firsthand and second hand is sometimes corruption is a rampant and I think being a part of a company that is clean in the way it goes about doing things was important to me and so I checked those three boxes very interesting and so so currently your role is explain to people who don't know what your current role is yes um uh I am responsible for the lodging Supply uh the B2B side of Expedia group and by that I mean all Hotel relationships all vacation rental relationships under verbal uh that falls under my remit so my team and I are the ones that many of you may be dealing with on a daily basis on an account management level we are widely distributed globally in the market and we are the ones who account manage acquire hotels on a platform or vrs on a platform as needed and the day-to-day optimization and account management and this is across Expedia Brands this across all Expedia Brands Expedia group um verbal all of our Brands hotels.com that has these giant Billboards in Times Square yes which is probably the only place this was yesterday I was walking past 10 Square which by the way as you know no New Yorker really ever walks I try I stay away from Times Square you've probably seen it more than that yesterday for some reason I was there I forget what it was but um I saw these giant hotel hotels.com Billboards um so um I want to start with a big picture question um is um I said upfront that the pent-up demand phase is over yes and obviously you are sitting on top of a lot of data um what's your sense of is the pent of demand part of the business of the of the travel recovery can we still call it recovery it is not recovery I think it's not over so I may have a very different take to this based on what we see on our platforms you know on a on uh well Expedia is not recovered from an earnings perspective but anyway go ahead yes just from a general demand standpoint I think what we are seeing is there is there are more people who are willing to travel I mean we we do this not because that's what we feel we do a lot of research most recently in Q4 we reached out to almost 27 to 30 000 people across 17 countries saying hey tell us what's on your mind right so this is based on that and what we see is there are more people who are willing to travel uh almost by a third as opposed to the recession and they are willing to spend a lot more money meaning they're setting aside money nothing new to us there's no ahas out here um you know if you think about the recession we we move from a stage of being alone to suddenly wanting to go and meet people we were you know from indoors we wanted to go and explore the outdoors and cross off a lot of destinations on our bucket list all of that stays but I think there are some really interesting quirky trends that we are seeing and which we are thinking of as the no normal we used to call it the new normal there is nothing normal about these Trends and I'll I'll share a few sure yeah one is you know it was it was fascinating for me um we were just talking back in the in the green room and isk for a couple of days to Nashville over the holidays three or four days amazing it's like an Austin 2.0 pubs are full live music people are just wanting to get that this this notion of cultural capitals is emerging and urban Vibes is coming back up again so on our platform if you think about the sum of the destinations like Montreal and Edinburgh and Bangkok there are some of these that Lisbon in Portugal these are coming up so cultural I think attachments is a real thing the second one is travel inspired by TV and streaming services is real if you think about a couple of years ago I mean you think about Lord of the Rings and suddenly people thinking about oh my goodness New Zealand that's the place I need to be we were writing early stories on that was you think about Game of Thrones and Ireland and Croatia Emily in Paris for some of you who may have seen that or Downton Abbey right wanting to go and see this amazing real estate mentions and the countryside of UK these are all real things in fact what was really interesting inspiration has moved to non-traditional things non-traditional in fact uh the the traditional you know advice from family and friends is only two percent higher in terms of the influence it has over TV that's how much it can influence your travel the third element that we see is wellness and we see this rising in certain destinations on the world we talk about Wellness in terms of I want to have sporting activities and and meditation sessions all good but today what we're seeing is The Quirk here the wellness the better I did not know about this to be honest with you but I learned about something called silviotherapy or what therapy Silvio therapy this is therapy getting energy by immersing yourself amongst trees in a forest well that's the forest base it's the first time I heard a thing like you actually go and like take a shower in the forest it turns out that's not what it is well I mean there's foreign that's exactly what I thought too but it's it's a thing right chakra sessions I mean we speak about this with a little more Authority from India because that's where that's originally from yeah but that's Wellness is puppy yoga now that's something I would sign up for right I mean have puppies but these are these are all quirky but this is what the Travelers are looking for something that is very different Frugal travel I think people are not willing to spend all the dollars in one shot they're willing to take smaller steps my son is a great example he was not afraid to stay in a two and a half three star hotel but if that hotel had a stunning view of the Eiffel Tower he's going to sign up for it and I think fourth and end with this finally inclusive travel is becoming important the ability for somebody to identify yourself as a traveler in a marketing campaign we did a interesting I read about an interesting campaign run by Panama it's called the next turn and it was about traveling through Panama rainforests and looking at the volcanoes and coffee plantations Through The Eyes well proverbial eyes of a blind person so it is all about the sense of is smell touch sights and sounds and so on so these are all becoming real I wouldn't call them Mega Trends but if there's if these are services that an establishment provides let it be known to the world and talk about it it's funny like about the basic 101 a lot of destinations forget which is let it be known let it be known yeah a lot of that um so um you know one of the things and this is true for for us as a company we're seeing all the layoffs happening in Tech uh you know 15 000 here 17 000 here 10 000 there meanwhile travel in general even though it's not fully recovered and you know particularly business travel isn't and Asia is just coming online China is just starting um the the push and pull that we're trying to figure I have 15 20 hires for the year should I go ahead and hire all these people or should I pull back and be cautious but we're not seeing any slowness in our business today this is we're going to see slowness of travel sees slowness because our business comes from the travel industry um but as you're thinking about hiring for your teams as well as you know Expedia overall um how are you calibrating in your head in terms of for instance hiring look I think I would say we have not seen a Slowdown and and I think said talk about the various different travel patterns we're seeing I'll just go back to we saw a very similar trend on our platform and I'll come back to the hiring question but we saw a very similar Trend that happened right after the recession in 2008. I can lean on this because of 20 years with Expedia so I can go back 20 years and look at some of the numbers but uh people didn't stop traveling they just they just travel differently they said I want to travel I can no longer afford going all the way to Hawaii but hey California affords the sun and the sand of the beach and I don't need to jump on a plane how about California right I thought I would splurge on a five-star luxury you know Retreat for myself I can no longer afford that I can no longer afford a seven night length of stay but I will do with the five nights so I think people travel they just traveled differently so in our world it is being sensible about hiring if there are some areas that are key Focus areas for your company this is where you're putting your energy and effort we would say um don't let up go and hire the people that you need in those elements but at the same time be cautious about not over hiring some areas that you don't want to and you definitely need to go through your you know with a with a fine tooth comment to um is this travel Industries because travel industry is always sort of struggled and I don't know if that's too strong a word on getting Tech Talent compared to um you know the big tech companies for instance and since now there's a downturn clearly in the tech world is this an opportunity for Expedia to be able to Hoover up more Tech Talent indeed I mean Seattle is your background Seattle we have a big Hub in uh you know San Francisco uh yes it's been it's been you know it's been tough in the tech world in the last couple of weeks there's been a lot of news and but it's also an opportunity saying hey there are roles available in other organizations uh it's a great opportunity for the individuals to use their networking to reach out but also for companies a lot like ours to proactively go and see what is the talent out there and whether there's a match and a skill set so we definitely look at this as an opportunity um coming to sort of your portfolio on the hotel side and I'm going to talk from a consumer point of view which is um you know the rates have the highest they've ever been uh in the hotels at least anecdotally that's what it feels like to Travelers um are we going to see any let up in 2023 based on sort of what you're looking across from in your platform in terms of pricing power well I think um look I mean there are a few things that we're going to see from a from a hotel standpoint having spoken to so many players there are a few things that is a reality operating a hotel is becoming a lot more expensive today than it used to be three or four years ago supply chain labor and so on I was speaking with the GM of a hotel in Germany when I was traveling and she had to change the hotel to a four day work week get paid for seven days but you're going to pay four days wow sorry you're going to show up for four days because that's the only way she could get talent in the labor shortage world if you will right there is also so that's one dimension and then there is a travel and no let up on the Travel side which is which is resulting in you know people are willing to give up on occupancy points to keep the rate and the ADR and that's probably that what we're going to see for the foreseeable future I just don't know for how long so I don't see the rates being led up from a consumer standpoint what we are seeing from a consumer feedback standpoint is okay we were very patient during the pandemic where you are not you pulled back some of the services this is based on the reviews on the Expedia platform all of that right you pill back on some of the services okay it's been two years life is kind of coming back to normal we are not walking around with masks anymore it's about time if you're raising the prices bring back the service levels where it used to be you can't have it both ways and we hear that very often from our yeah we did a story yesterday Dennis did a story yesterday the sonder which used to charge for cleaning uh cleaning fees just um did away with their cleaning fees which is um I guess that's a thing of a sign of things to come which is I guess I don't know if the daily cleaning will come back because a lot of hotels as you know have at least the lower to Mid scale have the hook um sorry yeah um housekeeping but um but but some of these uh things that that change during the pandemic are probably coming back to normal I mean there is a there is an expectation from the from The Travelers for sure like we have been on your side we understand that the industry has gone through a turmoil but it's about time to bring back the services or adjust the pricing you can't you can't have it both ways and that's something that we hear very often yeah I mean New York continues to be absolutely nuts in terms of pricing it's crazy I'm glad I'm a resident here very much very much so so um let's talk about uh since you also look um after the verbo um product as well as there's inventory there the short-term rentals obviously went through a giant boom during the pandemic Airbnb verbo verbo was the was really uh just a breakout star for Expedia during the pandemic again talking about um about pent of Demand versus the normality what does normality for verbo today look like I think the runway for us on verbo is is is is is long and the reason we say that is for a couple of things one is that it is no longer a question of hotel or VR the world that we're living in today is a hotel and vacation rental right I mean consumers have gotten used to this is an amazing category that we thought was playing catch-up with the hotel industry a few years ago and now it is right there right it's a it's a big boy kind of on the table specifically from a verbal standpoint we've been a very U.S Centric indexed business right the runway for us to expand internationally and not a footprint non-city primarily I mean non-city primarily that's right more so uh you know Suburban destinations full houses private homes and we see the the what is interesting though again on the on the verbose so there is international expansion and footprint but what we do see from people today in terms of what their expectations are from a VR in terms of amenities has changed pretty dramatically so I'll give you a few nuggets if you will the most searched amenity for us on the verbal side two years ago 25 of our searches for verbal amenity people wanted a waffle maker interesting Family Travel you're traveling with kids breakfast but how are they telling you that what is that how are they telling you they want to either through the conversation platform like hey or through our own research as we speak to the VR owners that's what that's why travel Travelers that's what we learn today you know we we've always said right for Humanity this is you know you know the whole thing about like people making bread in their homes during the pandemic I guess this is the equivalent to the VR World similar right and we we say that kitchen is the is the is the center of the universe in a home and it's no different in a vacation rental so people are now looking for amenities that are full-blown kitchens you want to have a barbecue and you want to have a airfryer you want to have the world-class coffee machine I mean these are the ways in which the VR business and amenities so we call it food amenities is what we call it right um and I think the the other searches that have gone exploded on a platform is for we call it Cowboy occasions and this is the the searching for ranchers and lodges right you know these stunning views and vistas of of wineries but in this Ranch setting I mean we are seeing some changes some quirky changes again on the VR side but the runway for us to answer your question is long on on verbo and so um are you beginning to in terms of the product presentation on Expedia uh I'm trying to remember what it is on expedia.com is it when you when people are searching do they show both hotels and vacation we do we do show both uh there is a lot of work that we need to done to to do that to make it seamless for a traveler it can be a little confusing it is a little bit of a I wouldn't call it Patchwork but we are learning as we're going right we are going to be moving towards a single traveler facing platform for both VR today they operate on two distant platforms it's not the most efficient yeah I mean this is what Peter Kern has been doing exactly came in right to integrate a lot of the back end a big leap for us both on the supplier and on the on the Travel facing side which is lined up for 2023 which is going to be great and we'll be able to leverage all of our loyalty programs that we have yeah talk about the Loyalty because uh when I interviewed Peter on stage at our global forum last year he was talking the one Keys launching this year this year so that you build it up a lot yes better deliver yes this is the the single loyalty program across all the Expedia brands that you've been talking into earnings calls for for many quarters now uh in interviews Etc so so tell as much as you can um yes and we will um I've been recorded it's even live um so for those of you so um our loyalty programs on Expedia group across our house of Brands is very deleveraged right every every brand has got its own version its own currency of a loyalty program in fact some of our sites don't have a loyalty program verbo is an example hotels.com viewers expect loyalty programs out of OTAs in general historically I mean hotels.com had one yes Expedia had one Expedia had one but hotels.com was more known among consumers had a had some loyalty towards it if I if I'm not mistaken I don't know about consumer expectation but you know for repeat customers it's a great degree of kind of convert stickiness right and bring in some loyalty so we are trying to create a singular currency amongst all of our Brands and if you look at it from a consumer standpoint the ability to earn on hotels.com and burn on Expedia the ability to earn a hotel and burn it on air the ability to do this combination we don't think there is any other player out there who is today in today's world who's got the ability to do that and the ability to you know save on today's trip and earn points for the future I think it's a great value proposition to the consumer on the on the supplier side um we had about 155 million unique users you know loyalty members if our loyalty program was a country today it would be the ninth largest country on this planet it would sit behind Bangladesh and above Russia that's what the size of a loyalty program would be so it's a great value proposition to be able to go to Partners who want to have access to these Travelers because they are uh you know high value repeat kind of and so on and so forth and I think we have a great value proposition for both and creating an amazing virtual cycle that's what that's how we see it so when is it launching uh you should expect it somewhere in the summerish of this year but more to come okay I should mention that we do have questions uh we do have uh we will take some questions if you have uh you can go and ask the questions and I'll be able to ask Hari uh I think this is um this is where you were um with um China opening up and you don't have much business inside China inside China no what is what type of business do you see from China if you do we see um so we have affiliate Partnerships so we do get an action of the outbound traffic from China I think our our focus in Asia is on different countries it's not on China as of now okay so talk about um markets that you're that you're excited about you you obviously travel quite a lot you were in Singapore I think of a few months months ago and so what are parts what new I mentioned the reason I'm excited about 2023 and Beyond is the go the global traveler flows are changing and we both come from India we were talking earlier about how India is going to become the most populous nation in the world this this year sometime in April that's the estimate and we're going to talk about it later as well on why that's important um what's what parts of the world uh are you excited about we are um so of course we are super excited about here this is our this is our home if you think about Asia if you will from an India standpoint our focus on India is building on Supply and that is because we see uh one of our friends is about bringing International Travelers outside of the US and North America and some other markets in Europe and have them go in other parts of the world for which you need Supply in India right uh but in terms of areas where I am most upbeat about is the Americas of course the the Giants in Europe right the UK and France and Germany that that's an interesting area for us Australia South Korea and Japan these are the areas these are is our heat map if I would if I would call it on the Expedia side so both on the verbal side and on the hotel side of the business it goes both ways yeah um I I asked this question and uh to Peter last year and he give a detailed answer I want your maybe update on it sure Expedia has has said that they want to move move away from Performance Marketing or at least the sort of the lowest common denominator of Performance Marketing the money that it spends on Google and other platforms and wants to focus on um I don't know what the right term is but higher value Travelers that that doesn't just mean like more rich people but it means uh people that would come directly and so um so how are you thinking about Performance Marketing as you're talking to your hotel Partners now yeah so I think Performance Marketing for us is so as Expedia has gone through a transformation we moved away from we moved away from what used to be a very siled kind of approach hotels.com had its own Performance Marketing team and Expedia had its own marketing team and so on and so forth to uh a more unified House of Brands a singular team that looks across all of our Brands and all of our patterns I mean that's the that's the structure that we move towards across many function experience not just marketing even product and Technology right so that's one our focus on Performance Marketing here rafat is about bringing in that Direct Customer if there's an opportunity for us to bring that high value customer bring them and download on app and into interact with us using our interfaces if you will that's what we would prefer for us our view on Performance Marketing is your marketing to a consumer but you're also building you have to build a great product that goes along with your marketing message and what you're trying to create and experience right so our focus is has been on on both the sides of people great product experiences supported with great marketing where people can come and create the stickiness we talked about the one key that's really key for us and we build that value and that's the that's the cycle that we see uh let's take a few questions uh does Harry have insights on business travel can it recover how is it impacting his Biz uh we uh I guess it's 85 or so is what you know that's a broad number in terms of what business travel is recovered at least in the U.S and people are saying This Is The New Normal get used to it this is the new normal I think with business travel we we continue to see an uptick I think I think business travel coming down to zero is that's never going to happen you're always going to have a business travel it's just going to take time there was a first question out there I think it was on we we're looking at bottom-up or top down yeah um I'll ask the questions um good thank you but I guess okay do you worry about potentially alienating the major Hotel Brands marriage Hilton Etc with your loyalty program as they build further scale I think the way our view out here is hey we are not we are not competing with any one particular program I think if there are Partners who would like to participate and get access to those consumers that are on our site that is great I think we are thinking about a more holistic kind of a program where it's not always based on just price if there are other elements we can add uh for our program that may comprise of um you know points or it could be perks or something else then that's a contract that we are I think there will be partners who would be willing to talk to us about it as opposed to give me a lower price for our members that might not that might not stick in the long term um there's I actually like this question the um the fintech question yes and I know you guys are are I I talked to Peter on stage about this as well on sort of fintech products or buying out pay later I'm guessing you have you offer options uh on expedia's brands for buying we've had that for a while yeah um what's yours one adoption wise how's it doing well there are many there are many many partners on a global basis because we've had this for a while we've had this for over seven or eight years now right so there's a lot of Partners and I think this is an important one because consumers in different parts of the world they do e-commerce differently right right uh in in Asia it's different in Brazil not only do you need to offer payment methods but you need to create installments that's the way Brazilians do e-commerce so anybody who creates this capability is you're going to win because you're going to speak to all kinds of consumers on a global basis okay um did you mean the herbicide will merge with oh my god did you just create news did you mean the verbal side will merge with Expedia site or remain independent no no no the verbal side will remain independent on its own okay he's um that was not what he said no it's the it's it's more so think of it as a tech stack and not the consumer facing website okay all right I think we're out of time thank you Hari excellent it was great to be here thank you so much thank you

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Length: 29min 10sec (1750 seconds)

Published: Thu Jan 12 2023