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Expedia, the world's largest online travel company by revenue, has relocated its India head Vikram Malhi to Singapore, as the managing director of the entire Asia business. This is part of the company's restructuring exercise for the Asia business. The move, Expedia says, is in line with its international functioning where one person heads a cluster of markets in a region and lets the local marketing teams lead each country.
In India, Expedia is yet to get the desired results in making it the top online travel company. After eight years in India, it is recalibrating its strategy to grow in the country.
In spite of being the second-largest in Asia, next only to Japan, Expedia's India achievements fall short of its expectations. The company has been investing on marketing, but has a lot of ground to cover as far as brand awareness goes. Especially in a market largely dominated by online portals such as MakeMyTrip, Yatra.com (market leaders with an instant brand recall), Expedia is working on a strategy to get ahead of the competitors.
"We have the right product, but we need to tell people what Expedia is. In the long run, our scale is our advantage," said Malhi.
While Expedia boasts of an inventory of 290,000 hotels in the world, in India, the number is just 6,000. This is less than that of MakeMyTrip and Yatra, which have more than 10,000 hotels each in their domestic inventory. Expedia has managed to leverage its global hotel network to get an edge over its competitors when it comes to outbound travel. However, to get more attention from India's highly aspirational traveller, Expedia is planning to focus its energies on spreading the word about its brand and reach.
The one thing Expedia has got right, something which the others are still struggling to achieve, is the tilt towards the non-air revenue which contributes more than 60 per cent of its total business. Non-air business, which includes hotels and packages, is where the margins lie; the margins in selling air-tickets are wafer-thin. For most online travel agencies (OTAs), the major chunk of their business comes from ticketing.
Given that almost all of the air-ticketing business has moved online and for hotels these are still early days, is Expedia not losing out on a huge market? "We won't make any irrational decisions to grow. They (competitors) want to grow market share and go public. We don't have that pressure. In the long term, our strategy will pay off. There is almost a blood bath going on in the ticketing business," Malhi added.
Three years ago, Expedia India had signed an exclusive joint venture with Malaysia's low-cost carrier Air Asia, but the partnership came to an end last year with the airline deciding to sell on other portals.
"They came to us because our focus was not flight tickets. We didn't want to stump their growth. It is important for them to gain critical market share," Malhi said.
Another unconventional approach that Expedia adopted is deciding not to open any retail outlets. Instead, it has started a travel agent affiliate programme, where it ties up with local agents to sell its products.
