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Expedia spinoff could lead to greater dominance in online travel
Expedia’s recent successful spinoff of its travel business, creating the largest online leisure travel provider in the world, also has paved the way for the company to expand both in the US and worldwide.
Shares of Expedia stock rose $1.35 in the wake of the 9-year-old travel behemoth’s separation from its corporate parent, Barry Diller’s IAC/InterActive Corp.
Expedia is generally regarded as the dominant player in the online market with a 41% market share in the US. But Steven McArthur, president of Expedia’s North American Leisure Travel Group, said there is still room for growth.
“This allows Expedia and its associated brands to stand on their own merits and be able to look at each opportunity independently,” he told the Seattle Post-Intelligencer.
Mr McArthur estimated that Expedia has just 4% of the US travel market, valued at about $300 billion annually.
He said Expedia is looking to grow not only in the US but internationally.
“One of the great things about the spinoff is that Expedia now has its own currency that they can use,” Henry Harteveldt, an analyst at Forrester Research, told the Intelligencer.
He said there were enormous growth opportunities for Expedia outside of North America but that they would have to move quickly because of the strong competition.
“Culturally, Expedia has to become more of a partner to its travel suppliers and differentiate itself from Travelocity and Orbitz,” he said.
Expedia will also be facing more competition from airline and other sites that are increasingly finding ways to have customers buy directly from their own Web sites.
Report by David Wilkening
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