Operating across 32 countries, the Expedia Group is one of the largest travel companies in the world, with a portfolio of brands ranging from its eponymous full-service online platform and marketplace Expedia to companies such as Hotels.com, Egencia, trivago, Vrbo and HomeAway, and has its eyes set on Brazil. Since 2012, when it officially started to operate in the country, the global company that helps travelers plan and book travel on a wide range of services–from flights to activities–has boosted its presence in the country, with offices set in the major cities of Sao Paulo, Rio de Janeiro, Fortaleza, Recife, and more recently, in Florianopolis and Salvador.
For the company, the country is relevant both as a starting point and as a destination.
Although at a slow pace, the reform and fiscal austerity environment is beginning to bear fruit in tourism, with good domestic results. According to the National Confederation of Trade in Goods, Services, and Tourism (CNC), the sector registered significant growth, raising as much as BRL 20.3 billion in October, 8.1% more than in the same month of 2018. In the first ten months, revenues from tourism activities reached BRL 184.6 billion, about 1.4% higher than the same period of 2018. Also according to CNC, services sector activity, as a whole should grow 0.8% in 2019, and advance 1.9% next year.
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At the same time, an Expedia research showed that travel demand to Brazilian destinations grew 30% in the first half of 2019, and the most well-traveled of the world between Gen Z, are, in fact, Brazilians, with 3,2 trips made per year, while the global average is 2,8.
The reasons for this growing relevance of the Brazilian market to Expedia are many. Among them is the surge of low-cost airlines in the country and the consolidation of this companies in other Latin American countries, as well as the ever-growing connectivity and mobile adoption in the region.
Last year, the company has invested $1,6 billion in technology, with Artificial Intelligence playing one of the leading roles of such investment. “The Brazilian and Latin-American markets are very important for Expedia Group, as we focus our efforts on having truly global platforms. As we continue to add properties, we are working through everything it takes to be locally relevant,” said the vice president of Latin America for Expedia Group, Freddy Dominguez.
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In an interview with LABS, the executive talked about the growing importance of these markets for the company’s global operation, as well as the particularities of Latin American travelers when it comes to preferences.
LABS – When did the Brazilian and Latin-American markets become interesting to Expedia, and which were the opportunities and potentials identified in there?
Freddy – Latin America is a huge and prosperous market and Expedia Group always knew that. According to the 2018 report of the World Travel & Tourism Council (WTTC), the direct and indirect contribution of the tourism sector to the region’s (LATAM + Caribbean) GDP reached $398 billion. That’s more than sectors like health, banking and automotive manufacturing generate. So, it was never hard for us to see the importance of this region for the group.
LABS – And which are the biggest challenges in operating in these markets?
Freddy – The Brazilian and Latin-American markets are very important for Expedia Group, as we focus our efforts on having truly global platforms. As we continue to add properties, we are working through everything it takes to be locally relevant. For example, by the end of 2019, Expedia Group forecasts translating over 412 million words (based on YTD actuals and Q4 forecast), and, of course, that includes always having our content in Portuguese. Having this local and personalized content for the region’s travelers is a great challenge for us, and that is something that we are always aiming, bringing new technologies and platform enhancements all the time.
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LABS – With many pieces of research related to the tourism market and Brazilians travel habits, how does Expedia evaluates this sector’s maturation through the last years?
Freddy – Brazil has been showing a good performance in our platforms. The travel demand to the country’s destinations grew 30% in the first half of 2019, comparing to the same period of last year. All regions of the country had good performance. Besides that, we know that the new generations make big efforts to do their travels. According to a recent study from Expedia Group Media Solutions, the Brazilians are the most well-traveled of the world between people of Generation Z (between 10 and 23 years old), with 3,2 trips made per year (the global average is 2,8).
LABS – In terms of numbers, Expedia Group has invested $ 1,6 billion in technology in the last year, having as one of its focus, Artificial Intelligence. Beyond this technology, which are the group’s initiatives for the future, mainly in the Latin-American market?
Freddy – AI is already embedded within Expedia Group’s platform today to enable deeper connections between suppliers and customers, and to provide actionable insights to our supply partners to optimize their business. Personalization has become the core disruptor to driving traveler satisfaction, with artificial intelligence (AI), and more specifically machine learning (ML), as the technology forces behind it, creating more meaningful interactions between a traveler and their travel experience. But today, ML is also helping our travel partners become better and smarter about how they interact with travelers and optimize their business.
Besides that, we know that people who book travel online want seamless and frictionless experiences, and this is a trend that will get more and more intense in the next years. Recently, we had a global research in partnership with Magid and found out the attributes travelers value the most that provide an easy-to-use, or frictionless online booking experience. They are:
- An easily navigable booking website
- Inventory that is the best value
- Ability to filter and sort a specific room type
- Option to redeem special offers
- Ability to quickly filter and sort specific hotel location criteria
That’s what we try to accomplish, in our two-sided platform approach: meeting customer demands while simultaneously building innovative technology solutions and infrastructure for our partners. That’s our goal for the next years in any market that we are investing in.
LABS – Regarding the Brazilian’s profile, what are the main differences when compared to other consumers? What about the profile of other Latin Americans?
Freddy – Brazilians, generally, stay fewer nights (2) in Brazilian hotels in comparison to Argentinians and Chileans (4 average nights, each). These countries are two of the three main origin markets for Brazilian destinations (with the other being USA), and also have the biggest booking window (56 days for Argentinians, 50 for Chilean) when traveling to Brazil, planning their travels with large anticipation.
LABS – Smartphone usage and mobile adoption rates, whether when shopping online or when using social media, are rapidly increasing in Brazil. How does Expedia benefit from this technological shift in the Brazilian market?
Freddy – Brazilians indeed have increased the usage of mobile devices to book or support their travels. Considering only these devices, the travel demand to the country’s destinations has grown twice as the general number. We expect this trend to keep growing in the following years.
Of course, as a company born already technological, Expedia Group is always working to have good products and solutions to attend this trend. Not only by having good, fast and responsive mobile apps, in which travelers can quickly choose a destination and book flights, reservations and activities, but also delivering management and mobile-friendly solutions to our partners, though our Expedia Group Partner Central app. There, hoteliers can manage their listings and speak to their booked guests while on the street or taking care of their business, for example.
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LABS – With the rise of non-traditional accommodation, does the hotel industry suffer threats in its business model? How does Expedia see the future of the accommodation industry?
Freddy – We consider our job at Expedia Group to ensure that our hotel partners are well represented across our brand portfolio so that travelers wanting a hotel experience can find and easily book the perfect hotel for them. Given that, we think that alternative accommodations and hotels generally appeal to different sets of travelers. For example, travelers who book with Vrbo are looking for a whole home to rent for a week whereas a business traveler may be looking for a standard check-in process and room service for a shorter stay. Diversification is important, as travelers should always have the choice in what best fit their travel needs, though chain and independent hotels will remain a critical piece of the ecosystem.
Using technology is crucial to stay at the pace of this change. By applying AI, for instance, companies can predict what consumers will buy based on personal buying patterns, and shopping for accommodations is no different. Imagine a booking experience that automatically recommends a specific hotel property based on your previous booking patterns from your past solo trips. We’re only scratching the surface of what we can do to deliver more personalized experiences, and faster than ever before.
LABS – What are Expedia’s initiatives regarding the growing trend of experiential tourism?
Freddy – We know that experiences play a big role in the travelers’ decisions on where to go. That’s why we offer an increasing number of tour activities that may be booked along with hotel nights and flights. We have over 35,000 activities available for the travelers in 1,800 destinations that they may choose. That’s part of our strategy to have not only a booking platform but one that relevantly informs the traveler’s decision and is a reference of destinations and experiences for them.