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Expedia CEO Is Unfazed by Airbnb’s Growing Vacation Rental Lead

Sean O'Neill, Skift
Expedia CEO Is Unfazed by Airbnb’s Growing Vacation Rental Lead

Expedia Group is hoping that this year’s rebranding of its home rental business Vrbo will accelerate the unit’s growth. The marketing push is coming as the rivalry heats up among it and other booking services for apartments, homes, and hotel rooms.

Mark Okerstrom, president and CEO of Expedia Group, wore a t-shirt branded Vrbo on stage Thursday at Skift Global Forum. Okerstrom said the rental segment isn’t a winner-take-all market, and that Vrbo can retain its position as one of the long-term leaders by spending more on marketing.

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Sources who have looked at privately held company’s first-quarter financial results last month showed that Airbnb had racked up more booked room nights than Expedia Group did in the first three months of the year. Airbnb reportedly booked 91 million room nights, versus 80.8 million for Expedia.

“Airbnb has built a great business,” Okerstrom said. “I have nothing but respect.”

However, since Okerstrom masterminded 2015 acquisition of HomeAway rental booking company, Okerstrom said that Expedia Group had revved up its performance. The group integrated HomeAway’s content into the Expedia technology platform. It also revamped the rental service’s consumer and homeowner experiences. Okerstrom called the services “infinitely improved.”

That said, Okerstrom acknowledged that the merger had experienced some hiccups along the way.

“The SEO [search engine optimization] volume and a shift in marketing spend away from some of the legacy or regional brands and toward the Vrbo brand did put some pressure on bookings growth,” Okerstrom said.

“But the Vrbo brand is growing nicely in the double digits,” Okerstrom said. “I think if you look back five years from now and you say what was that you’d say that’s just a bump in the road.”

Supplier Relations

Okerstrom said he was pleased that Expedia Group will next month become the exclusive distributor of Marriott International wholesale and promotional room rates, availability, and content to bedbanks, and other redistributors when they don’t have a direct connection with the hotel chain.

Marriott has, in effect, gotten into a king-size bed with Expedia. The hotelier is using the online agency as a giant channel manager, or middleman tech service for accessing its inventory. Hotel bedbanks, such as Spain’s Hotelbeds, Australia’s WebBeds, and Indonesia’s MG Bedbank, will need to work with Expedia’s business-to-business arm to get the selected hotel inventory after October 15.

Okerstrom also said he was pleased Expedia Group announced on Monday that it had signed signed a fresh multiyear contract with United Airlines after a contentious period of haggling. In April, a federal judge took United’s side in a contract dispute by tossing out an Expedia motion to grant a preliminary injunction against the airline. United had sought to withdraw flights on Expedia for travel if talks failed.

Okerstrom said Expedia Group didn’t announce any change to its policy of not charging commissions on hotel resort fees. He said Expedia Group’s preferred method of discouraging hoteliers from adding such fees was technological. It uses its algorithm to reduce the visibility of properties in its search results when it detects the hotels aren’t transparent with consumers about fees.

Okerstrom’s stance differs from some competitors, like Booking Holdings. On Wednesday, CEO and president of Booking Holdings Glenn Fogel said his company intended to begin charging commissions on resort fees, saying that the main intent of the commissions is to discourage the practice.

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