The world in his hands

Ex­pe­dia CEO relishes the daily bat­tle to ex­pand on global stage

China Daily (USA) - - FRONT PAGE - By LINDA DENG in Belle­vue, Wash­ing­ton lin­dadeng@chi­nadai­lyusa.com

Dara Khos­row­shahi, the CEO of Ex­pe­dia Inc, said he didn’t know how much he would love it, when he first joined the com­pany 11 year ago.

Un­der his lead­er­ship, the global leader in the on­line travel in­dus­try has grown to more than 18,000 em­ploy­ees with $6.6 bil­lion in an­nual rev­enue. In ad­di­tion to Ex­pe­dia.com, its brands in­clude Or­b­itz, Trav­e­loc­ity, Tri­vago, Ho­tels.com, Hotwire and many oth­ers.

In China, Ex­pe­dia ended its 10-and-a-half year re­la­tion­ship with eLong on May 22, 2015, by sell­ing its 62.4 per­cent stake in the com­pany to in­vestors, in­clud­ing Ctrip. Khos­row­shahi said the eLong sale did not mean Ex­pe­dia was giv­ing up on the bat­tle to suc­ceed in China’s mar­ket. Rather, it was just a shift in strat­egy.

Ex­pe­dia and Ctrip have agreed to co­op­er­ate with each other to al­low their re­spec­tive cus­tomers to ben­e­fit from cer­tain travel prod­uct of­fer­ings. It also re­cently launched a China-spe­cific Ex­pe­dia web­site in the main­land (www.ex­pe­dia.cn). Both are ef­forts by Ex­pe­dia to tap the Chi­nese out­ward bound mar­ket through ag­gres­sive in­vest­ments and part­ner­ships.

“We sell the best prod­uct in the world so it is so easy to be pas­sion­ate about it,” he said. “I love the prod­uct, I love tech­nol­ogy and I love the com­pany’s global na­ture. I’m as ex­cited as I could be.”

Khos­row­shahi re­cently spoke with China Daily about his China strat­egy, lead­er­ship and per­sonal life. The fol­low­ing are edited ex­cerpts of that in­ter­view.

How do you see China’s on­line travel busi­ness and the fu­ture of the mar­ket?

If you talk about China and on­line, you have to talk about mo­bile. How quickly it has gone mo­bile; how quickly it has gone to the app. For us, the par­tic­u­lar fo­cus in China is go­ing to be on China out­bound. We have a part­ner­ship with Ctrip on the pack­age side. We want to use our in­ven­tory of more than 300,000 ho­tels world­wide and make it avail­able ei­ther on agency or pack­age rates, and pipe it to all of our Chi­nese lo­cal part­ners to re­ally make that in­ven­tory avail­able to Chi­nese con­sumers who are look­ing to travel all over the world.

What’s the big­gest dif­fer­ence be­tween the China mar­ket and the US mar­ket? What are the chal­lenges in the China mar­ket?

I think the China mar­ket has been much more com­pet­i­tive on the dis­count­ing front be­cause it has been grow­ing so fast. China is be­hind the US as far as con­sol­i­da­tion goes. The de­struc­tive price wars be­tween Didi and Uber drove con­sol­i­da­tion.

That is some­thing that China is right in the mid­dle of now, but which has al­ready hap­pened in the US. That is one sig­nif­i­cant dif­fer­ence. Another sig­nif­i­cant dif­fer­ence is that China is ahead of the US with mo­bile pen­e­tra­tion and es­pe­cially app pen­e­tra­tion. And the struc­ture of the Chi­nese apps, which are fully pack­aged, is a very dif­fer­ent ar­chi­tec­ture from US apps that tend to be for sin­gle use. The chal­lenge for West­ern com­pa­nies is to be rel­e­vant to lo­cal Chi­nese con­sumers, who are very savvy, un­der­stand a lot about ser­vice, are very de­mand­ing and want the ser­vice the way they want it. So we do think that to ad­dress China, we have to do it not only with a great prod­uct, but also though part­ner­ship. And we are com­mit­ted to both.

It is in­ter­est­ing that you and Ctrip used to be com­peti­tors in China, but now you are part­ners. What is Ex­pe­dia’s strat­egy in China?

Ob­vi­ously there is a big do­mes­tic mar­ket and a big out­bound mar­ket in China. I think com­pa­nies have to be hon­est and re­al­is­tic about their strengths. Lo­cal Chi­nese play­ers can be stronger in com­pet­ing for lo­cal Chi­nese travel, ver­sus West­ern play­ers who try to build to com­pete in the Chi­nese lo­cal mar­ket. So we look for a lo­cal part­ner. We have known Ctrip for a long time, and they are the top player in China, so we de­cided to sell eLong to them. Ac­quir­ing eLong was at­trac­tive for Ctrip be­cause com­pe­ti­tion for the do­mes­tic mar­ket was get­ting fairly un­prof­itable for all the play­ers.

As a part of the sale we had a com­mer­cial agree­ment with them to power their out­bound travel, es­pe­cially on the pack­age side. Now a sig­nif­i­cant amount of Chi­nese out­bound travel is on travel pack­ages. So our strat­egy is to fo­cus on the out­bound, and we think it is a good strat­egy. We are in an early stage, and we are very op­ti­mistic about where it will take us. Com­pa­nies should fo­cus on where they can have value. We think we add sig­nif­i­cant value for the Chi­nese out­bound cus­tomer, and we are go­ing to fo­cus on that mar­ket.

What is your cor­po­rate cul­ture?

We have a set of cul­tural norms. One of our norms is trans­parency. It is the kind of com­pany we want to be. When you move up and up, you know less and less about what is re­ally go­ing on be­cause peo­ple are afraid of be­ing hon­est with you. So our strat­egy is to be bru­tally hon­est with our em­ploy­ees. We are very trans­par­ent about what is go­ing on at the com­pany, and they are free to be trans­par­ent and talk back to us. We build a cul­ture where peo­ple can be them­selves, can be suc­cess­ful and can re­ally op­er­ate with­out fear.

What is your man­age­ment style? Are you a tough leader?

I would say yes and no. You have to have dif­fer­ent man­age­ment styles based on the sit­u­a­tion that you are in. The com­pany is do­ing re­ally well, and we’ve been do­ing re­ally well over the past five years. But it is a man­ager’s job to guard against complacency, to be tougher. So peo­ple don’t get over­con­fi­dent, so they don’t get blinded by their own suc­cess or miss some­thing. And through the tough times, I will ask tough ques­tions. But if I think that you are right per­son to take on a task, I will en­cour­age you, coach you and cheer you on.

What has your big­gest achieve­ment been as Ex­pe­dia’s CEO?

I love the cul­ture of the com­pany. The com­pany is be­com­ing some­thing spe­cial. What I love about the com­pany is that it is a place where you can be your real self, your truth­ful self, and you can suc­ceed with your own style. It is a very trans­par­ent, open com­pany and dif­fer­ent peo­ple can suc­ceed in dif­fer­ent ways here.

This is a com­pany where the power comes from the idea, not from your ti­tle. It is a very data-driven com­pany. Ev­ery­one’s idea is equal in the com­pany.

What are your life and busi­ness philoso­phies?

Keep it sim­ple. Busi­ness peo­ple tend to over-com­pli­cate sit­u­a­tions. Sim­plify things. To sim­plify what you are good at and what you should fo­cus on is a real test of a com­pany. I tell peo­ple a lot that the test strat­egy isn’t what you are go­ing to do, but it is what you are not go­ing to do. Per­sonal life is the same thing. Know what makes you happy and stick to it. For­get about ev­ery­thing else.

How do you han­dle hard­ships and set­backs?

I like hard­ships and set­backs. I am­not the kind of per­son to go on a beach va­ca­tion. For my hon­ey­moon we went trekking to see go­ril­las. I like a chal­lenge. If you look what the com­pany has ac­com­plished dur­ing the past 11 years, and hope­fully what we will ac­com­plish in the next cou­ple of years, no one can ac­cuse this com­pany of rid­ing a wave. We have fought for ev­ery inch and ev­ery suc­cess. Ev­ery­one here has been to­gether and in­cred­i­bly close. That is be­cause we have been through a lot of bat­tles and I think that’s what shapes you as a per­son. So I love the fight, and I love the hard­ships. They are what makeme tick.

What are your hob­bies? How do you spend your time off duty?

I have four chil­dren and they take a very sig­nif­i­cant amount of my time off duty, which I am very happy to do. Travel for me and my wife Syd­ney is a real pas­sion.

She loves go­ing any­where and ev­ery­where. So we do travel. And when I have time on hand, I play some com­puter games. I am a com­puter geek at heart. I try to get the odd hour to play strat­egy games.

PRO­VIDED TO CHINA DAILY

Dara Khos­row­shahi, the CEO of Ex­pe­dia Inc.

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