Before he put on a suit and ran a multi-billion dollar company, Mark Okerstrom was a backpacker, travelling through Thailand, Malaysia, Vietnam and Cambodia, with his wife. Both spent six weeks each time exploring South-east Asia in two trips.
Today, the closest the president and chief executive officer of Expedia Group gets to a holiday, he says, is a “work trip” which he is currently on with his family. But the appetite for local authentic experiences remains and while in Singapore, he and his family went for a private home-cooked dinner with a local host.
“It was our first experience with private dining and we enjoyed it. Travel is about meeting new people, new experiences, it’s not about sitting in that middle seat on an aircraft,” said Okerstrom who took over the reins of Expedia Group two years ago.
Of course, much has changed in South-east Asia since those backpacking days and “these things have done it,” said Okerstrom, pointing to my iPhone that’s recording our conversation.
Mostly, they have changed for the better from a business perspective, he said, but the downside is “during those times of backpacking, the places we visited, they hadn’t seen a lot of Westerners and that was a unique experience. So that freshness has gone away. If you look at the big Asian cities and compare them with the big European cities, they are starting to look more alike.”
So how do you feel being responsible for this, I asked. “I blame Apple and Google for that, not us,” he laughed. “We are the platform to allow people to experience the world and we are working with governments in countries like Thailand to get tourists to understand that yes, city centres are incredible, but there’s much more to discover.
“It’s good for travellers (to spread out), they crave authentic experiences and this is great for those who work in the travel business – from tour guides to hosts – and we help create new economies.”
(Image credit: Expedia Group)
Here’s what Okerstrom and I caught up on during his “work trip/holiday” to Singapore this week.
Q: We last caught up in December in Las Vegas, just eight months ago. What has the past eight months been like for you?
It’s been a whirlwind, tons of change, across the group too, moving at the speed of light.
Q: You’ve also lost Aman (Bhutani, president of Brand Expedia, who’s left to join GoDaddy)?
Yes, Aman is a great leader but as with any big organisation, we are able to train great leaders who can go off to do wonderful things. Great companies plan for succession.
Q: Like with you and Dara (Khosrowshahi)? What are the events you’d rather not have happened?
There isn’t anything I’d single out. Every disappointing event and negative surprise somehow lead to some piece of serendipity and, two years after, we’re glad that happened. Look at what’s happened with meta search channels – Trivago has gone through transformation the last couple of years and it will emerge a stronger company with better service for its customers. Had what happened with the OTAs pulling back not happened, they wouldn’t have been forced to innovate.
Q: Wouldn’t you rather the legal dispute with United Airlines not have happened?
In all relationships with major strategic partners, when at any point, you’re forced with a choice, not to be in business or be in business together, it forces people to ask, how do you create more value, how do you increase the piece? What companies like Marriott, Hilton or United do is incredible – they do things we can’t do and, at the same time, we do a whole bunch of things really well.
Any conversation that starts with ‘if you don’t do this, we’re out of business with each other’ – I say, ‘if you don’t want to be in business, go’ but let’s actually acknowledge that it’s not a good outcome. Instead, let’s get back to the table and create win-win scenarios. I am optimistic that will be the case with United and all our strategic partners.
Q: You believe a happy medium can be found?
Not only that but a greater plane – we are looking for deals where our airline partners are truly better off and so are we.
Q: And what are the events you’re happy that they happened?
We have been very focused on three major strategic themes – be more customer centric, getting away from the world where we think of traffic and transactions but actually recognising that traffic (those 750m monthly site visits) is actually our customers (you) and we can learn more about them, and be locally relevant.
The last item is about unleashing the power of our platform, 7,000 of the brightest data architects, AI experts, product and engineering folks – it’s about putting our engineering power and resource towards things that really matter. For example, the great revenue management tools we have built for our lodging partners and on the customer side, how we solve family travel, how do we book two connecting rooms, how can we book a whole house?
Q: On that subject, what do you think of Agoda’s new “Mix and Save” feature?
The challenge is the customer experience – we have a similar functionality – the issue is if you can do it in the same hotel, how do you make sure the customer doesn’t have to change rooms? It’s tricky.
Q: Everyone’s trying to innovate and differentiate in competitive times
…Yes, and with AI and computing power, the pace of that is changing and I feel we are on the cusp of a new vector in innovation that is much more personalised and automated.
Q: So you are still in love with big tech and not disillusioned? There’s been so much backlash …
There’s been backlash against the big platforms that have not necessarily anticipated some of the abuses that can take place on their platforms. I am not disenchanted. Big tech needs big leaders who understand the responsibility and I think in some cases a certain degree of regulatory oversight is important as well.
Q: You took over a very well-run, established company and some might argue it’s a harder ask to take over than to start over – growth is harder to achieve, competition has become more intense, the organization has become more fixed and set in its way, it is 23 years old. What did you have to unlearn when you took over?
It would have been easy for me to step in and say I will continue on essentially the path that Dara and I were on. But we had gotten to a point where to go to the next level, we had to do a bunch of things differently, and so I had to never totally forget, but never rest on your laurels. I had to forget the successes of the past, forget the things that we had tried before that didn’t work and we had to push everyone to say, how can you imagine a better future, standing on the shoulders of what we have done but not shackled by them?
Q: How do you keep fighting like a hungry startup, assuming that’s important to you?
The tech world is littered with the bodies of the complacent. The second we are not delivering incredible experiences for customers and partners, that’s the second a new competitor will emerge that will do better than us. If you combine ambition, fear and passion with incredible assets and capabilities, you can produce a great company.
Q: You say we are at a new vector in innovation and things are moving really fast. So at this time, do you feel a collaborative style of leadership still works or do you need a more autocratic form of leadership to move faster?
It’s a combination. At least in our industry, you need so much expertise and no one sits on top of all this information to be able to make top down decisions without collective input.
Know the knowable – if a decision is incredibly important and irreversible, you have the obligation to collect as much information as possible before you make that decision. If a decision is not that important, you collect enough information and then you just go. There’s a trade-off between speed and quality and decisions that do not have major consequences, you can sacrifice quality for speed because you can fail fast and try again. For decisions that are irreversible, you can sacrifice speed.
Q: Know the knowable. What do you know a lot of?
Travel, because I do a lot of it. I am reading “Sapiens” right now – about the evolution of man. I can get passionate and curious about a bunch of things and everytime I think I am somewhat of an expert in something, I meet someone who’s smarter than me, more expert than me, and I love that.
Q: Competition is coming at you from several angles and it’s like you have to set up a defence on many fronts, from flights to hotels to tours & activities and vacation rental. Let’s do a quick checklist on each.
Hotels – what’s the most interesting development happening in this sector, as far as you are concerned?
The in-stay experience, the mobile check in. We have Alice that we own the majority of – with your phone, you’re essentially tapping into the back office system and we are able to, for our hotel partner, track responsiveness and help deliver better customer experience.
Seeing companies like Marriott help blend the reliable trustworthy experience of a hotel with the uniqueness of alternative accommodation – that’s interesting. Back to our conversation about negative events – if you had asked any of the hotel chains three years do, do you wish Airbnb did not exist, they would have said yes but yet, you can see innovation happening and it will produce better outcome for our customers and they will become stronger companies for it.
Q: Tours & activities – hot sector, lots of acquisitions and funding coming into it. Would you pay so much money for companies like Klook or GetYourGuide?
If I would pay that much money, I would have paid that much money.
Q: That’s a non-answer.
There’s a lot of excitement, it’s a space where the Internet has not penetrated as deeply and where intermediaries can provide a lot of value. So it’s not surprising that it’s attracting a lot of capital. Expedia’s well positioned and executed really well, we’ve been doing it for 20 years, we have not invested as aggressively as we could have but we are on the path to get much more serious about – cross-sell and push notifications – so watch this space.
Q: Booking.com is getting pretty active on putting together the connected trip.
It’s in our DNA. It’s interesting that Booking is doing this but when you are the platform that provides the flight, cruise, car rental, lodging experience, we have the capability to stitch it all together and be able to when your flight is delayed, offer you a room, breakfast or a tour,
The concept of the connected trip is the promise of the Expedia Group. I don’t think anyone in this industry in the world is as well-positioned to do it and we are doing it. We just have to get better and better at it.
Q: There’s a lot of talk about superapps – Trip.com wants to be a travel superapp, Traveloka the travel and lifestyle platform, Grab the everyday superapp. What does Expedia want to be?
We are the world’s travel platform. No other company can literally take anybody from any place in the world, give them an incredible stay, experience … the global breadth of what we do, our geographic footprint, 575 airlines …
Q: But how do you stitch it all together? Do consumers, you think, want to book a hotel through a ride-hailing app?
I’d say no. But do people want a seamless experience when they are travelling, to have a trusted global player standing behind them, when things go wrong, do people want that? $100 billion in bookings in 2018 says yes.
Q: Let’s talk vacation rentals – why Vrbo? HomeAway just seems easier to say. In July, this business reported an uptick in revenue, reversing two quarters of declines. You must have been relieved – does this signal renewed momentum in your fastest-growing category?
It’s coming up. Vrbo was the birthplace of alternative accommodation. Before that term came up, people were using Vrbo in the US, some parts of Canada and Europe. We went out and surveyed people to find the best word and Vrbo was it. We are super excited about the business and integrating all that alternative accommodation (570,000 properties) onto Expedia, onto Hotels.com and that unleashes a huge opportunity to expand into urban centres like Paris.
Q: Let’s talk Google – it is into everything and it’s getting better and better and it’s looking more like an OTA.
Google is and will continue to be a great partner but as it relates to search generally in most parts of the world, they have become dominant and dominant players have economic incentives that can harm industries and in that respect, a certain amount of regulatory oversight is needed but oversight has to be appropriate and thoughtful. Rushed regulation is generally bad. They are one of the great examples of innovators that have changed the world and we have to be careful not to crush that.
Q: This is the turn of a decade – 2019. Name one key event that has happened this year that you think will have profound impact on the future of travel.
US-China relations. We have to do better there, I fear we’re moving in the wrong direction, that we are becoming more polarized as opposed to more connected. Travel is the antidote to solve that.
Q: We are the right industry at a time of hate?
We are the right industry, one of the most important industries for the current times, but I fear that the climate is causing people to be fearful.
Q: What do you wish you understood more of?
Everything
Q: What would you like people to understand more about you?
I am a pretty open book, maybe to my detriment.
Q: What’s the strangest question you’ve ever been asked?
If I dance, and I have danced during interviews.
Q: How do you stop a compulsive talker at meetings?
Ask someone else a question.
Q: You love to dance – who’s got the best moves in the industry? Who are you watching?
I am watching all of them closely and all of our competitors have great moves. Ctrip and how it’s orchestrating its expansion outside China, Booking.com has done a phenomenal job in so many areas, Airbnb for having that emotional connection with customers. They each have their own strengths and we are trying to leverage our strength.
Q: What’s Expedia’s strength?
We ultimately are the future of travel. When you look at what matters – global, scale, assortment, quality of brands, customer experience, partner experience – we are the whole package. It’s hard for a big tech company to be excellent at everything simultaneously and that’s one of our weaknesses and that’s what we are working on.
• Featured image credit: Popartic/Getty Images