In the News: Expedia Group is Optimistic Heading into 2021
The article was published December 2020 in Travel Market Report.
Expedia Group, which includes Expedia, Hotels.com, Expedia Cruises, and more, held its annual conference last week, updating its members on how the company has dealt with the impact of the COVID-19 pandemic and reporting what they are seeing heading into the new year.
Matthew Eichorst, president of Expedia Cruises and Global Cruise Leader at Expedia Group, took some time during the week to talk to Travel Market Report about his take on 2020 and what the group is doing to prepare its advisors and franchise owners for 2021.
“Nobody knew the extent of where we were going to be going,” Eichorst told TMR. The group made a number of moves during the pandemic to help its franchise members the best it could, including being lenient with franchise fees and making its fee programs variable, with pricing attached to the recovery.
Now, almost eight month into the pandemic, the group can see the light at the end of the tunnel.
“We’re very optimistic about the future because the uncertainty is shrinking. There is still uncertainty out there but we are making progress and we can see in the future with the rolling out of the vaccines and the testing that travel will become vibrant again,” he said. “We might be 20 miles into a marathon and sometimes that’s the hardest time.”
Expedia Cruises, like so many agency groups, has seen movement from its franchisees during the pandemic. While they’ve lost members, they’ve also been able to add 16 new ones for the year, with a trend of people coming into the industry and buying multi-franchises.
“There’s a real optimism that the recovery is going to be much stronger for the business as far as the time to get into the business,” he said. “We’ve seen a great couple out of Virginia just purchase three that will open in 2021 and on Long Island, a gentlemen has 10 cellular stores and he said he wants to get into the travel business and he wants to run multiple locations. His intention is he wants to open 6 stores.”
“The interest has been less but the quality has been high. People are very optimistic going forward.”
Right now, the focus for Expedia Cruises is on its U.S. expansion—the group already has a major presence in Canada. The focus is on developing a bigger presence in states it is already in and where cruise lines source a lot of their guests from, along the coast lines. The group is still looking in the midwest and central U.S., as well. The hope is to continue its expansions in places where agencies might have been forced to fold because of financial stress due to the COVID-19 pandemic.
“Great brand like Expedia Cruises that show up in the community when possibly another store that has been there for years didn’t make,” he said. “If someone purchased a franchisee in October they are very well aware of what’s going on in the world – if they think about their store being open in a community in June, July timeframe there is going to be a lot of people reaching out saying that they want to travel.”
Positive on the model and on the trade
While Expedia is part of a larger OTA group, its hybrid model of trade with Expedia Cruises, has made it fairly unique within the industry. Eichorst told TMR that he believes that model gives it an advantage heading into 2021.
“I think our model is something that is super unique,” he said. “I believe our channel in particular is going to recover faster than the industry does as whole.”
Expedia is using its past passenger database to source some leads for its advisors, “we want them to know that if they want to have that personalized service, we can connect them to vacation consultants in their area.”
Eichorst also said that a major opportunity now lies ahead for advisors
“Resilience is a key word across all of us at this point. The agents that stay in the business – there’s going to be a surge of demand that’s going to be needing professional people to serve them, I hope that is going to be our agents but I think it’s’ going to be an industry leading thing,” he said.
“We want to be part of rebuilding the industry just not for our own interest but for suppliers, consumers, and advisors.”
As part of its annual conferences, Expedia revealed that, as part of a consumer survey done in October, one in two travelers are comfortable, or even excited, about taking a trip over the next 12 months.
Part of that was because of COVID-19 protocols, including mask enforcement and hygiene measures, but most of it came from “a pent-up demand” for travel that will only grow as the world continues to move through the COVID-19 pandemic.
According to the survey, travelers are more likely to take trips between April and September 2021 and Generation Z and Millennial travelers are 1.5-times more likely that other generations to take a trip in the first half of the year.
Vaccine availability could also drive those sentiments—57% of travelers said that they would be comfortable traveling if a vaccine is widely available, a trend that was captured even before the major vaccine news broke in November and December.
For cruising, Eichorst told TMR that he sees the first time cruiser was a lagging indicator to the cruise industry’s recovery.
“Maybe the first timers really start to book the midpoint of the year versus the past passenger,” he said. “I think as seen as there’s a clearing as when ships are actually sailing, past passengers are going to return in mass. We are geared up for that. “