Expedia Group, Inc. (EXPE): Business Model Canvas

Introduction

The travel industry has seen significant growth in recent years, with the rise of online travel agencies and the increasing popularity of travel among consumers. According to a recent report by Statista, the global travel industry is projected to reach a value of $1.1 trillion by 2023. In this rapidly evolving industry, one company that stands out is Expedia Group, Inc.

The company operates as an online travel agency, offering travelers a one-stop platform to book flights, accommodation, car rentals, cruises, and other activities. Expedia Group generates revenue through commissions and fees charged to travel suppliers for transactions made on its platform, as well as through advertising and subscription services. Its extensive partner network and technology platform provide customers with a seamless booking experience that sets it apart in the crowded online travel space. Expedia Group has not only established itself as a leader in the online travel industry but has also expanded its reach through strategic acquisitions, such as its recent acquisition of HomeAway, a competitor to Airbnb. By diversifying their offerings, Expedia Group continues to attract a broad range of travelers and stay ahead of emerging trends in the travel industry. As the travel industry continues to grow, Expedia Group's commitment to innovation and strategic partnerships means it is well-positioned to maintain its success in the years to come.

Key Partnerships

Expedia Group, Inc. understands the importance of strategic partnerships in order to continue to grow and expand its business. The following are key partnerships that the company has established:

• Hotel Partners: One of the main sources of revenue for Expedia Group, Inc. is from hotel bookings. The company has established partnerships with thousands of hotels around the world in order to offer their customers a wide selection of accommodations to choose from.
• Airline Partners: Expedia Group, Inc. has partnered with major airlines such as Delta, United, and American Airlines to offer their customers competitive prices on flights.
• Promotion Partners: The company has established partnerships with various promotion companies such as Groupon and LivingSocial to offer customers discounts and deals on travel packages.
• Technology Partners: Expedia Group, Inc. has partnered with technology companies such as Adobe, IBM, and Microsoft to improve their websites and mobile applications, and to provide better customer experience.
• International Partners: In order to expand their business globally, the company has formed partnerships with international travel agencies such as Ctrip in China and eLong in China to provide localized services in those countries.

Expedia Group, Inc. continues to develop new partnerships in order to remain competitive in the travel industry and to serve their customers better.

Key Activities

The key activities of Expedia Group, Inc. (EXPE) revolve around its core operations that are focused on providing online travel booking services to customers worldwide. These activities are:

1. Developing and maintaining travel platforms: Expedia Group's primary activity is the development and maintenance of online travel booking platforms. This includes designing, developing and improving user interfaces, search filters, booking engines, payment systems, and mobile applications that deliver high-quality customer experiences.

2. Marketing and advertising: To attract its customers, Expedia Group engages in multichannel marketing campaigns that include website promotions (such as discounts, loyalty points, and cashback offers), email marketing, search engine marketing (SEM), search engine optimization (SEO), and digital display ads. The company also runs social media campaigns and partners with other travel industry players to reach more customers.

3. Managing inventory: Expedia Group sources travel products such as flights, hotels, prepaid car rentals and vacation packages from suppliers in bulk. The company then manages the inventory and aggregates it onto its platforms. The aim of this activity is to offer customers a wide range of options to choose from as well as competitive pricing.

4. Data Analytics: Expedia Group has a dedicated team of data analysts who collect and analyze data to optimize business processes, identify opportunities for growth and enhance customer experience. The data analytics function also supports the development of machine learning algorithms that personalize recommendations and promote upselling and cross-selling.

5. Customer support: As an online travel booking company, customer support is a critical activity for Expedia Group. The company operates a global contact center where customers can get assistance with booking travel products, making payments, canceling reservations, and filing complaints. Customers can also access support through the company's social media accounts and online help center.

6. Managing partnerships and acquisitions: Expedia Group has established partnerships with airlines, hotels and other service providers in the travel industry to expand its inventory and increase its customer base. The company also frequently acquires smaller companies that provide complementary services or superior technologies that can enhance its core operations. The company's Partnership and Acquisition Management teams are dedicated to driving growth through such initiatives.

7. Compliance and legal operations: Expedia Group has to comply with various regulations and legal requirements in the jurisdictions where it operates. It has a team of professionals dedicated to ensuring that all operations comply with relevant laws and regulations, including privacy laws, data protection, and anti-money laundering regulations.

• In conclusion, these key activities are critical to ensuring the proper functioning of Expedia Group's business model as an online travel booking company.

Key Resources

Technology Platform: Expedia's proprietary technology platform is its key resource, enabling seamless online booking and reservation management. The platform integrates global distribution systems and various third-party travel product suppliers. It is constantly updated and optimized to provide superior end-to-end booking experiences to its customers.

Brand Reputation: Expedia has established a strong reputation over the years as a trustworthy and reliable online travel agency. The company's brand is recognized and respected by travelers worldwide, resulting in high levels of repeat business and customer loyalty.

Content: Expedia's content includes information on thousands of destinations worldwide, including hotels, flights, rental cars, activities, and attractions. The company invests heavily in the curation and maintenance of this content to provide accurate and up-to-date information to its customers.

Human Resources: Expedia Group employs over 25,000 people worldwide, including highly skilled professionals in technology, customer service, marketing, and operations. The company invests in training and development programs to help its employees stay current with the latest industry trends and technologies.

Data Analytics: Expedia leverages data analytics to gain insights and optimize various aspects of its business operations, such as pricing and inventory management. The company has access to vast amounts of data on customer behavior, travel trends, and other relevant metrics, which are used to drive data-driven decision-making processes.

• Supplier Relationships: Expedia Group maintains strong relationships with various travel product suppliers, including airlines, hotels, and car rental companies, and negotiates favorable terms and rates to ensure a wide range of inventory at competitive prices.
• Intellectual Property: Expedia Group has a range of patents, trademarks, and copyrights related to its technology platform and other business processes. These assets allow the company to protect its competitive advantage and prevent infringement by competitors.
• Financial Resources: With a market capitalization of over $20 billion, Expedia Group has significant financial resources at its disposal for investments in research and development, marketing, and expansion into new markets.

Value Propositions

Expedia Group, Inc. (EXPE) is a leading online travel provider that offers a wide range of services to its customers. Its value propositions are as follows:

• Convenience: Expedia offers a convenient way for customers to book their travel needs online. Customers can easily search for flights, hotels, car rentals, and activities on its website, which is available 24/7.
• Competitive prices: The company uses its extensive network of suppliers to offer competitive prices to its customers. It negotiates with airlines, hotels, and other vendors to get the best deals and pass on the savings to its customers.
• Customization: Expedia offers a personalized experience for its customers. It allows them to customize their travel packages based on their preferences and needs, such as combining flights and hotels, adding car rentals, and selecting activities.
• Trusted reviews: The company provides customer reviews and ratings to help customers make informed decisions about their travel plans. It also works with verified reviewers to ensure the authenticity of the reviews.
• Rewards program: Expedia’s rewards program, called Expedia Rewards, allows customers to earn points for booking travel through its website. Customers can redeem the points for future travel or other rewards.
• Mobile app: Expedia’s mobile app makes it easy for customers to book travel on-the-go. The app allows customers to search for and book flights, hotels, and car rentals, view their itineraries, and receive real-time flight alerts.

Overall, Expedia’s value propositions are focused on providing a convenient, affordable, and personalized travel experience for its customers. By delivering on these value propositions, the company has become a trusted leader in the online travel industry.

Customer Relationships

Personal Assistance: At Expedia, we understand that travel planning can be overwhelming at times. Therefore, we offer personal assistance to our customers through our customer support team who are available 24/7 via phone, email, and chat to help with any travel needs or issues.

Customer Feedback: We value customer satisfaction, and thus we provide avenues for our customers to give their feedback. We have online surveys, reviews systems and a dedicated feedback team that engages with our customers to gather their insights and suggestions on how we can improve our service delivery.

Customer Communities: To encourage customer loyalty and retention, we have developed online customer communities where customers can interact with each other, share travel tips, and advice. These communities serve as a platform for customers to find solace, encouragement from like-minded travelers, and provide them with emotional connections to the Expedia brand.

Personalized Customer Experience: We employ data-driven techniques such as machine learning algorithms to access our customer needs and preferences, with the aim of serving them a more personalized experience. Whether it's showing customized travel recommendations or providing tailored promotional messages, we aim to provide our customers the best possible experience while using our service.

Partnerships: We work with other travel brands, including hotels, airlines and other travel service providers, to offer our customers the best deals possible. Our relationships with our partners allow us to provide seamless booking experiences and ensure our customers' travel journey from beginning to end.

Channels:

Expedia Group, Inc. (EXPE) uses various channels to reach its customers. The company primarily operates through its online platform, www.expedia.com. The website provides a one-stop-shop for travelers to book flights, hotels, rental cars, cruises, and activities. Aside from its primary website, EXPE also operates several other websites, including Hotels.com, Travelocity, Orbitz, Hotwire, and Vrbo. These websites cater to different types of travelers, ranging from budget-conscious to luxury travelers. EXPE also uses various marketing channels to advertise its services. The company participates in various online travel agencies (OTA) meta-search engines, such as Kayak, Skyscanner, and TripAdvisor, to drive traffic to its websites. Additionally, the company uses targeted email marketing and social media channels like Facebook and Twitter to reach potential customers. EXPE also has partnerships with airlines, hotel chains, and other travel-related companies to increase its reach. The company uses these partnerships to offer bundled packages, promotions, and rewards programs to its customers. The company also has a mobile app for travelers, which can be downloaded on iOS and Android devices. The app allows customers to book travel and view itineraries and reservations. Overall, EXPE's multi-channel approach to reaching its customers allows it to cater to different types of travelers and expand its customer base.

Customer Segments

Expedia serves a diverse range of customer segments, primarily within the travel industry. Individual travelers: This is the core customer segment for Expedia. The company provides personalized travel assistance and offers various options to individuals for booking flights, hotels, car rentals, and vacation packages. These travelers can be further segmented based on their travel preferences, such as budget, destination, duration, and mode of transportation. Corporate travelers: Business travelers are another significant customer segment for Expedia. The company offers customized solutions to corporate clients, such as travel management tools, booking platforms, and travel expense tracking. Expedia also provides discounted rates and other incentives to corporate clients to encourage loyalty. Travel agents and agencies: Expedia offers a range of tools and resources for travel agents and agencies that help them access a broader range of travel options and provide enhanced booking experiences to their clients. These include affiliate programs, white-label solutions, and other partnerships. Destination marketing organizations: Expedia partners with tourism boards, hotels, airports, and other travel-related entities to promote tourism and drive bookings. The company offers a range of marketing tools and data analytics services to help these organizations understand their target audiences and improve their marketing strategies. Other travel-related businesses: Expedia also serves various travel-related businesses, such as airlines, hotels, car rental companies, and cruise lines, by offering distribution channels and access to new customers. The company leverages its vast customer base and data analytics capabilities to drive bookings to these businesses. Overall, Expedia caters to a vast and diverse customer base, leveraging its extensive network and digital platforms to provide personalized travel experiences to its customers.

Cost Structure

Expedia Group Inc.'s primary cost structures are the cost of revenue and operating expenses. Cost of revenue is the cost of acquiring hotel room nights, airline tickets, rental cars, and other travel services sold to travelers across its brands. Operating expenses are the costs incurred to run the business, such as salaries, marketing expenses, technology expenses, and depreciation.

Cost of Revenue:

• Supplier Payment: Expedia Group provides various travel services to consumers, but they do not operate any airlines, hotels or rental car companies. The company cooperates with intermediaries and the fee that goes to intermediaries remains a significant portion of the cost of revenue.
• Acquisition Cost: The cost of advertising, promotions, and search engine optimization to attract customers increases the cost of revenue.
• IT Infrastructure: Cost of maintaining and developing IT infrastructure for the expedia website also goes into the cost of revenue.

Operating Expenses:

• Salaries and Wages: The company spent around $3.2 billion on salaries and wages for its employees in recent years.
• Marketing: Expedia Group spends a significant portion of its revenue on advertising to attract new customers and retain existing ones.
• Technology: Cost of technology infrastructure development and management such as software development, hardware, and software licenses.
• Rental and Facilities: The company operates out of different offices around the globe, and the related rental costs are counted as an operating expense.

Expedia Group continually reviews its cost structure to ensure that costs remain aligned with revenue by analyzing its suppliers, investing in scaling the businesses, and making operational improvements to reduce costs.

Revenue Streams

The main source of revenue for Expedia Group, Inc. (EXPE) comes from the following:

• Booking Fees: Expedia charges booking fees that range from 10% to 30% (depending on the hotel or airline) every time someone books through their platform. This fee is paid to Expedia as a commission from the hotel or airline. This is the primary revenue stream for the company.
• Advertising and Media: Expedia also generates revenue from advertising and media. Companies pay Expedia to advertise on their platform, which generates additional revenue for the company. Destinations and tourist spots also pay to be featured on the platform to attract more tourists.
• Other Revenue Streams: Expedia has diversified its revenue streams to include other sources such as car rentals, travel insurance, tours and activities, and other travel-related services. These additional revenue streams allow the company to provide comprehensive travel services to customers, while generating additional revenue.

Expedia's revenue stream is highly dependable on the travel industry. Therefore, the company's revenue can be affected by global events such as pandemics, natural disasters, or economic downturns that could affect the travel industry. However, despite the challenges, the diversified revenue streams of the company help it to remain competitive and continue to provide value to its customers.

Conclusion

In conclusion, Expedia Group, Inc. has a solid business model that has allowed them to establish themselves as a leader in the online travel industry. By offering a variety of branded websites and services that cater to different types of travelers, the company is able to reach a wide range of customers with different needs and preferences.

The company's revenue streams, which include commissions on bookings, advertising and media revenue, and customer service fees, are diverse and provide stability in the face of changing market conditions. Additionally, Expedia Group's strategic partnerships and acquisitions have allowed them to maintain a competitive edge and expand their offerings.

It is clear that innovation and customer satisfaction are at the core of Expedia Group's business philosophy, and this is evident in their commitment to developing cutting-edge technology and offering personalized travel experiences to customers. Moving forward, the company's business model and approach position them well for continued success and growth in the global travel industry.

• Expedia Group's strengths:
• Diverse revenue streams
• Strategic partnerships and acquisitions
• Innovative technology
• Commitment to customer satisfaction
• Opportunities for growth:
• Expansion into new markets and regions
• Increased focus on mobile and online booking technologies
• Expansion of customer loyalty programs
• Development of new partnerships and collaborations