Expedia may be about to plop down $3.9 billion to acquire an Airbnb competitor, but Expedia CEO Dara Khosrowshahi insists that has nothing to do with his company fearing the new kid on the block.
Airbnb has been disrupting the lodging industry for a while now, driving an explosion in peer-to-peer vacation rentals as the so-called sharing economy takes hold. That poses a serious threat to Expedia, which continues to make the majority of its money through good old fashioned hotel bookings.
Speaking on stage at the annual Phocuswright travel conference in Florida last week, Khosrowshahi said this new breed of competition, which he calls alternative accommodations, is a “fact of life” that’s going to be around for the foreseeable future.
He also noted that these rentals usually end up being cheaper than hotels, so Expedia is going to see increasing price pressure over the next few years.
But, at the same time, he said he’s not too worried about Airbnb taking too big of a bite out of his company’s travel business. Even asked who he fears more between Airbnb and Booking.com, a more traditional competitor, Khosrowshahi said Booking.com is more dangerous.
“[Booking.com is] going right at the heart of our revenue,” he said. “I think Airbnb is going to be an important product, but it’s going to be a product. It’s not right at the heart of the lodging ecosystem, in my option.”
He added that alternative accommodations are clearly something travelers are increasingly looking for, and so that’s why Expedia wanted to get some skin in the game through the HomeAway acquisition.
“You can spend your time resisting change or resisting consumer trends,” Khosrowshahi said. “And the people who do that typically lose share over a period of time. Or you can look at those trends and you can act based on those trends. It’s here to stay. It’s going to grow.”
Shares of Expedia have been soaring in recent months, with the Bellevue-based online travel company seeing its stock increase 47 percent this year. The company now has a market value of $16.3 billion.