Expedia Inc.’s chief executive officer is expecting more company in the world of online travel booking, predicting Facebook Inc. will follow Google into the business.
Facebook is already working on e-commerce, letting users save their payment information on the social media giant’s site and purchase products they see advertised there directly through “buy” buttons. It’s just a matter of time before that turns into booking vacations too, Expedia CEO Dara Khosrowshahi said in a May 11 interview at the company’s headquarters in Bellevue, Washington.
“We do think that travel is such a significant portion of e-commerce that Facebook will have a travel-specific product,” he said.
A Facebook spokesman declined to comment.
Expedia and competitors like Priceline Group Inc. have grown into massive companies over the last two decades by taking a cut from the hotels and flights travelers book on their websites. Google now lets users book trips and lodging directly through its search engine, a feature the U.S. Justice Department cited when it approved Expedia’s takeover of Orbitz last year, saying Google was increasing competition.
Risks & Opportunities
The development would bring both risks and opportunities for Expedia and rivals, Khosrowshahi said. The online travel agents could use the social network as a platform to sell their own products, but so could other entities.
“Social as a channel, Facebook as a channel, none of us have quite figured it out,” he said. “If there’s a player that figures out social in a big-scale way, that’s a player that is going to steal share, over us and the other traditional players.”
For years, hotel companies have tried to find ways to drive more sales through their own websites so they can avoid the premiums paid to the likes of Priceline and Expedia when customers book lodgings and trips through them.
If Facebook pushes into travel booking it will most likely follow Google’s lead, building a tool that lets hotel chains and online travel agents show up in search results on the social network, Dan Wasiolek, an analyst with Morningstar Inc., said in an interview. It’s a system that doesn’t necessarily give either group a distinct advantage, he said.