When many hoteliers think about Expedia, words that come to mind include “booking,” “online travel agent,” or if they’re being less diplomatic—“the enemy,” “a necessary evil,” or “those guys who charge us a boatload to distribute our rooms.”

 

That’s not how Scott Durchslag sees the relationship. Durchslag is president of Expedia Worldwide, where he manages the strategy and operations of the eponymous travel booking site.

 

The word he’s looking for to describe the relationship between Expedia and hotels—in fact, the word he’s looking for to describe the relationship between all players in the travel supply chain—is “partner.”

 

Sounds like a nice, public relations-friendly answer, doesn’t it? On the contrary, Durchslag doesn’t worry too much about making sure all of his partners like him. He’s more concerned about the traveler. He’s convinced that when travel suppliers—like hotel companies, airlines and booking agents—work together to make the consumer travel experience easier on all levels, from end to end, business will prosper.

 

“If you take care of the consumer, over time, that will help other parts of the business take care of itself,” he said. “Partnership as a core competency, and being able to orchestrate a value chain for an end-to-end experience is what will separate the winners from the losers.”

 

Consider Durchslag’s position: He joined Expedia one year ago from his previous role as COO at Skype Technologies. Today Expedia has relationships with 140,000 hotels, nearly 400 airlines, and many other events and elements of a trip. Its various business segments handle transparent travel booking (Expedia), opaque travel booking (Hotwire), hotel booking (Hotels.com), corporate travel (Egencia Business Travel) and more. With an MBA from Harvard University and experience in several mobile business divisions at Motorola, Durchslag has seen travel and technology from many perspectives, especially as a lifelong traveler himself. And his conclusion is that even in today’s mobile world, it’s harder and harder for consumers to travel, largely because they’re juggling so many pieces, from finding a flight to booking a room to actually enjoying their experiences.

 

“To deliver that end-to-end delight for travelers, we can’t do it alone,” he said. “Expedia can’t do it alone; hotels can’t; airlines can’t. We need to be invested together in being able to do that. It takes innovation. It takes relationships and a degree of trust.” Wait, trust? Trust the “necessary evil,” the company charging hotels to book rooms for them? Precisely, Durchslag said. In his opinion, it’s high time for a shift.

“I think Expedia was a disruptive force to the [hotel] industry when it came on the scene,” he said. “Yes, it delivered some tremendous benefits to consumers. That’s a reason it grew so big. But it made an impact to get there.”

 

The shift in mindset Durchslag said is necessary for the hotel and OTA industries to move forward is “away from the relationship as a zero-sum proposition to being a partnership, a win-win proposition.”

 

Right now, hotels set rates and make inventory available on Expedia and similar sites with varying intensity and to target different—often leisure—guests. And while many individual properties enjoy beneficial partnerships with OTAs they work with, the historical 30,000-foot gripe has been that hotels make less per booking from a room booked on an OTA than they do via property-direct channels.

 

1. Let go of the past.
Yes, there is a cost of doing business with Expedia, but the payoff, he said, is that more people have satisfaction with their travel experience, and they come back.

“The challenge for a country, and a company, is we always have a tendency to fight like our last war,” he said. “You look at what caused you the most pain over the previous 10 years and our natural human tendency is to overreact to that.

“All of us in the travel industry struggle with how to manage for medium-term growth and balance that out with short-term financial projections,” he said. “But anymore, that’s not sufficient. You need to be able to swim up and out of the water, like a porpoise, to look ahead and see if you’re positioning yourself strategically.”

While Durchslag sees a lot of hotels doing this, those weren’t necessarily his first impressions of the hospitality industry at large when he joined Expedia a year ago.

“The hotel industry was much less innovative than the industries I’d been living in, which were Internet- and communications-based,” he said. “Hotels were slower to be able to change. They didn’t always put the consumer first. But I could see as an outsider the challenges hoteliers have with revenue management and managing capacity. It can tend to make you somewhat inwardly focused.”

Fast-forward one year, and Durchslag says he has “a much better appreciation for the complexity and challenges [hoteliers are] working with” in terms of revenue management and channel distribution.

At the same time, he still sees hoteliers looking back instead of looking forward.

“Looking back just isn’t constructive,” he said. “Particularly given the pressures the industry is under, what’s happening in the broader macroeconomic environment, plus what’s happening with technology.”
And don’t think you can do it alone, he said.

“Instead of having a hunker-down attitude that our piece and our brand is all that matters, it’s all about partnerships,” he said. “Your hotel might be great, but what about the airline your guest came in on, and the car he rented? That’s all part of the trip, too. Who’s pulling it all together? No one player in that chain can do all of it, so we have to help each other and help the consumer have a delightful experience.”

Durchslag describes a recent hotel stay. Upon arrival, he wanted to make a change to his booking. “The hotel front-desk person said, ‘If you hadn’t booked the room on Expedia, we’d be happy to make the change for you.’ They wanted to encourage people to book directly with them, but think about how the consumer feels about that? Those disconnects don’t make sense to a consumer.”