Scott Durchslag: A traveller going places in new role at Expedia
The Business Interview: Company president aims to expand the online travel firm's Asia operation and is drawing on his techie past
Thursday 26 May 2011
Many bosses show passion for their businesses without ever having walked the walk. This accusation can't be levelled at Scott Durchslag, the president of Expedia Worldwide, the online travel business. He jokes that his passion for travel started with his first trip to London when he was still at college and since then his holidays became "progressively more adventurous until I got married".
In fact he has even climbed to Everest base camp from both the Nepalese and Tibetan side. However, it is likely that Expedia hired Mr Durchslag more for his extensive technology and business background than his mountaineering skills. Certainly his credentials seem to fit the bill, as he joined Expedia earlier this year from Skype Technologies, where he was chief operating officer. He previously held several senior roles at Motorola, which no doubt also helped his job application at Expedia.
Mr Durchslag now runs the strategy and operations of Expedia, which is part of Expedia Inc, the world's largest online travel company, which houses brands including Hotels.com, TripAdvisor and Egencia. Its portfolio includes more than 90 localised Expedia and Hotels.com-branded sites. Mr Durchslag has strong views about the direction of travel required at Expedia, such as fast-growing markets in Asia and adopting mobile technology.
But he admits its growth curve has not been as straight as desired after rivals caught up with the online travel pioneer. Expedia was founded as a small division within Microsoft in 1996 but was spun out of the software giant three years later to become a listed entity on the Nasdaq.
One reason for Expedia losing momentum was that rival online travel specialists "copied" elements of its model. Mr Durchslag says: "We were first 15 years ago and built that technology on a platform that needed to be dramatically improved and other followers copied our model, did it later and built it on what was then new technology."
Pitching in a baseball analogy, Mr Durchslag says: "Expedia invented online travel in the first inning. I think we were too slow in the second inning and now in the third we are playing a big, rapid game of catch-up with ourselves in certain parts of the world." Asia is a key area of its growth at this stage of the game.
The Asia-Pacific travel market grew by 17 per cent to $256bn (£139bn) in 2010 and actually overtook the US to become the second-largest regional market, according to the market research firm Phocuswright.
Playing catch-up in this region, Expedia unveiled a joint venture with the low-cost airline AirAsia to cover Asia Pacific in March. The new venture – which will operate Expedia-branded businesses in Japan, India, South-east Asia and other East Asian markets – has exclusive online third-party distribution rights in the region for AirAsia, AirAsiaX and travel packages. As a result, the partnership now offers one of the largest sites in the region to find and book AirAsia flights online at AirAsia.com, AirAsiaGo.com and Expedia.
Mr Durchslag describes the combination of products and exclusivity of content in the joint venture as "an unbelievably compelling combination". The joint venture will offer packages that span more than 130,000 hotels and more than 300-strong airlines that Expedia works with.
While Expedia now operates localised websites in 22 countries, Mr Durchslag says that "local knowledge and sensitivity to local cultures" is critical in Asia.
In places such as India, Mr Durchslag's only regret is that Expedia did not get into the country two years earlier. Given his background, it is perhaps not surprising that he is equally happy to wax lyrical about Expedia's use of technology. While Mr Durchslag often slips into the techie-speak of "modular service-oriented architecture" and "Web 3.0", he can also articulate in simple terms how Expedia is rapidly changing the way customers interact with its site, particularly on mobile devices.
For instance, in May Expedia unveiled a hotel booking application for Google's Android mobile devices that allows users to make a booking anywhere in the world with just four taps on their keyboard. Equally as clever is that Expedia Hotels automatically uses Global Positioning System, the global satellite navigation technology, to give travellers an easy way to research, filter and book rooms relevant to their location from a mobile device. Mr Durchslag said: "Whether it be from their mobile, their tablet, or their PC, Expedia customers can book the perfect trip from nearly anywhere, at any time."
While the use of smartphones is high on these shores, the company has also observed two distinct trends in booking behaviour in the UK, where Expedia launched in 1998. Mr Durchslag says the British are now more "price conscious because of the recession" and it has also seen more travel within the UK.
For instance, in the first quarter of this year, Expedia UK experienced a 96.4 per cent leap in searches for destinations on the outskirts of Glasgow and an 80.7 per cent rise for the Cotswolds. However, in the UK, where online bookings account for 44 per cent of the travel market, the top searches were for the Greek Dodecanese and Riviera Maya in Mexico.
But Expedia's US parent – which is to spin off TripAdvisor into a separate listed company – does not break out specific revenues or profits for Expedia so it is unclear how its UK business is performing. For the Expedia brand globally, hotel gross bookings rose by 9 per cent for the quarter to 31 March, but this was behind Hotels.com's 39 per cent growth, Egencia's 41 per cent and other brands up 22 per cent.
In defence of Expedia's performance, Mr Durchslag says the brand is playing catch-up with the investment and development cycle at the group's faster-growing stablemates.
But in the long term, Expedia looks well placed to keep growing in a global market where travellers will book a third of sales online by the end of 2012, according to Phocuswright. Mr Durchslag says: "We are making big investments in the technology platform and regions, such as Asia."
Journey to the top
He cut his career teeth at Motorola, where he managed several divisions. There, he was responsible for consumer research, intellectual property, product design and product strategy. He then became chief operating officer at Skype Technologies, where he oversaw global product marketing, sales, customer care and operations. He was hired as president of Expedia Worldwide this year.
Climbing mountains and sailing
Mr Durchslag lives in Seattle and is married with two kids. He loves climbing, sailing and trekking in the local mountains and on Puget Sound off the coast. He likes The Clash, The Grateful Dead and is "so happy" the Beatles albums are now on i-Tunes. A history buff, he has also read every autobiography of Winston Churchill – "one of my heroes".
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