E-Commerce Times Talkback

Re: Expedia Profits Surpass Expectations
Posted by: Elaine X. Grant 2002-01-30 14:01:21

See Full Story

In a clear signal that online travel is on the mend, Expedia reported much stronger than
expected earnings for the fourth quarter, with net income of US$5 million. Expedia chief
financial officer Greg Stanger said the company expects to remain profitable in 2002.
"In the events post-September 11th, it appears as though online travel has picked up
surprising momentum," Morgan Stanley analyst Mary Meeker said.

Re: Expedia Profits Surpass Expectations
Posted by: jbuhler 2002-01-30 14:17:29 In reply to: Elaine X. Grant

Expedia is definitely on the right track as selling commodity-type products such as airline tickets is no long-term profit proposition both online or offline. The future lies in the online sale of bundled products based on contract pricing with margin built-in. This has been the traditional offline tour operating model - now termed merchant model in the online travel space.

However, another key requirement for this type of more complex online sales to take off will be customization based on customer choice of destinations and components.

This is where the major travel sites still offer much less in terms of tailor-made custom-designed products. There is one leader in this field offering true multi-destination custom design with real-time online availability check and booking, and their model will be the one that will increasingly be followed as this segment of online travel will continue to expand.