Expedia's AI & Digital Innovation Strategy for Travel

As "the world's travel platform," Expedia Group is looking to knock down the barriers to travel, making it easier, more enjoyable, and more accessible for its customers and partners around the globe. To this end, Expedia has been turning to artificial intelligence (AI) and digital innovation to extend its platform's capabilities across a wide portfolio of businesses and brands that orchestrate the movement of people and the delivery of travel experiences on both a local and global level.

The Expedia Group Is Changing Its Strategy for Growth

Historically, the Expedia Group has been happy to make multi-billion-dollar marketing investments, seeing the outlay as the most efficient and data-driven manner of directing customer attention to their hotel room listings, air tickets, and other travel products. But, in recent years, some concern over the destination of this expenditure has arisen, as Google (the ultimate benefactor of much of the Expedia Group's investment) has effectively been working harder each year to act as a direct competitor.

This and other factors have led Expedia to view its marketing spend year on year in a somewhat different light. According to Expedia Group president and CEO, Mark Okerstrom, "What we've done is essentially been able to get much more sophisticated in our ability to understand what type of marketing is truly incremental versus just shifting bookings from one channel to another. And also, trying to get much more granular, essentially by marketing, not only in performance marketing channels, but also in other channels like television and digital video."

A Scientific Approach to Digital Innovation

As web access and mobile transactions expand in volume globally, Expedia Group has witnessed an increasing amount of interactions made by consumers and hoteliers on its platform. In emerging markets like the Asia Pacific, mobile channels are achieving massive adoption — to the extent that the average user of a smartphone checks it 110 times a day.

According to Pimpawee Nopakitgumjorn, Director of market management at Expedia Group Thailand, "This means every minute that you have with a customer now is worth way more than it used to be. The time that we have in terms of our ability to influence a customer is at a premium like it never has been before."

To meet the challenges and opportunities afforded by this new commercial landscape, Expedia Group is implementing an innovation framework based on partner feedback, which empowers the organization to understand and provide solutions for their needs, wants, and requirements.

Expedia Group's framework for innovation begins with the empathy stage and developing a deeper understanding of hotelier's operations and daily challenges. During the invention stage that follows, teams develop multiple hypotheses for what could be successful solutions based on the discovery of problems that hotel partners want to solve. In the final stage, inventions and new processes are tested and tweaked in line with observations from the real-time environment.

Using AI to Improve the Search Experience for Travelers

Expedia's new and more tactical approach to marketing spend and its scientific approach to innovation are especially relevant as the organization attempts to build in countries with obvious room for high growth.

For example, Expedia Group has recently been collaborating with AI Singapore (AISG) to develop an AI solution that will transform the online search experience for Asian travelers. A press release on the subject indicates that the performance of search engines declines significantly, and the accuracy of query resolution dips when dealing with travel search queries conducted in Asian languages such as Japanese, Korean, simplified Chinese, and traditional Chinese.

As a way of resolving this issue, a combined project team from the Expedia Group and AI Singapore will use natural language processing (NLP) and machine learning to develop an AI-based model that enhances search query understanding and resolution in the Japanese language. A successful pilot project will enable the group to extend the model to other Asian languages.

In this effort to enhance online search efficiency, Expedia Group will provide a team of experienced engineers, data scientists, and marketers to work with the AISG project lead, project managers, and AI apprentices.

Extending Digital Innovation to Country Partners

In August 2019, Tourism Malaysia signed two agreements with Expedia, sealing a commitment to collaborate in boosting tourism to Malaysia, facilitating digital innovation, and exchanging traveler insight.

The first deal, a Memorandum of Collaboration, aims to drive tourists to Malaysia by showcasing the country's attractions and cultures, in addition to supporting digital innovation in the tourism industry.

The second agreement focuses on a global campaign by Expedia Media Solutions to promote inbound travel from Australia, Japan, and the US to Malaysia. The two parties will also launch a series of workshops for hotel partners in Malaysia to foster digital innovation.

Expedia will also use its Partner Solutions network and technology to help both large and smaller scale travel retailers in the offline travel industry to improve their technological capabilities and be ready for the digital economy.

"Tourism is an important contributor to Malaysia's economy, accounting for almost 14.9% of the GDP and 3.4 million jobs," said Greg Schulze, Expedia Group's Senior Vice President of Commercial Strategy and Services. "As a world travel platform, Expedia Group is proud to be an online travel tourism partner to Tourism Malaysia, connecting Malaysia's tourism industry to millions of travellers in our worldwide network."

You can hear Troy O'Bryan, Senior Director of Growth Marketing at Expedia, speak at Digital Travel US 2020, taking place in May at the Hyatt Regency Indian Wells, CA.

Download the agenda for more information and insights.

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