As Expedia continues on its mission to automate the so-called hidden segment of ‘meetings, incentives, conferences and events’, Marriott signs a deal with a competitor.
Think mice, and one may well scream. Think ‘meetings, incentives, conferences & events’, in the travel trade known as MICE, and scream you may, but perhaps not with same degree of anticipation and excitement as the prospect of leisure travel to a remote desert island.
Still, Felix Undeutsch, Head of MICE & Groups, Expedia, seems genuinely excited. “It’s huge. It’s massive. This is about one third of global travel industry,” says the man who has been tasked with leading Expedia’s foray into this multi-billion dollar industry.
Depending on the study, we’re talking of an industry that is the stage to around 60-plus million events each year, and worth anything between $200 and $500bn to the global travel industry. Expedia, which has pinned a value of $400bn on the segment, first identified the opportunity back in 2014. At the time, the company had faced the challenge of arranging meeting space and accommodation for a group of internal executives who were flying in from different parts of the world.
Says Undeutsch: “It was a real pain to organise. The process was lengthy, nobody had an instant view of what was available, we had to wait days for a quotation; everything was a manual process. It was totally not what the leisure world, or flights or the car industry looked like.”
So began Expedia’s research to assess if it was actually possible to automate the process of booking MICE inventory. As a first step the team identified exactly what the issues were. There were three:
#1: Inefficient processes. Hotels do a lot of manual work, but only a fraction of their efforts converts to sales.
#2: No dynamic pricing. In the meetings world, RM is ignored. Unlike the leisure travel or flight industry, where prices vary daily depending on adjusted demand, with MICE, hotels tend to offer two to four packages. This is where it begins and ends; they don’t scale up or down based on demand, occupancy or pricing. Pricing remains static.
#3: Missing customer expectations. In an age of on-demand expectations, driven by apps like Uber, Airbnb and HotelTonight, the providers of MICE are just not reflecting customer needs.
So an opportunity with some pressing problems identified! Against this backdrop, the first step was to assess whether, as a tech company that is essentially a provider of hotels, the process could actually be automated, and for large-scale events the answer was a clear no. After all, organisers hosting a thousand attendees, for example, are unlikely to want to block book accommodation online, and will likely need to visit the venue to see what bells and whistles are possible.
