Expedia Eyes Market Share Gains In Europe With Branding Campaign

by Trefis Team
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Leading US-based online travel agency (OTA) Expedia (NASDAQ:EXPE), launched a new multi-million pound branding campaign in Europe earlier this month. Created in collaboration with advertising agency Ogilvy & Mather, the campaign will run for two months via TV ads, print and online advertisements as well as social media. Expedia’s previous campaign “Expedia Everywhere” positioned the company as a trusted travel provider.

The new campaign aims to set Expedia apart from other players in the travel industry with the new brand message - ”Travel Yourself Interesting” - demonstrating the interesting things people learn when they travel. Expedia hopes that more people will be able to relate to its marketing initiative as the new campaign will force them to reflect back on their travels. The company aims to reach out to a wider audience with its new campaign.

Though Expedia is the most popular OTA among American users with a 43% share of U.S. gross booking, Priceline (NASDAQ:PCLN) has a wider presence in international markets, especially Europe. [1] Despite Expedia attracting a comparatively higher number of unique visitors in Europe, Priceline’s booking.com was the main driver of OTA growth in the region in 2011 and 2012, and is currently estimated to account for 6% of the European hotel market. [2]

While growth in the U.S. travel market has slowed, European markets offer immense growth opportunities for OTAs. The European online travel sales is expected to grow at a CAGR of 5.7% until 2016, compared to 4.8% CAGR for the U.S. online travel market. [3]

Aiming to gain a stronger foothold in Europe Expedia acquired German meta-search engine Trivago in December 2012. Trivago has an inventory of more than 600,000 hotels, over 140 booking sites in 23 languages, across 30 countries in Europe. With close to 20 million unique monthly visitors, Expedia claims that Trivago was one of the fastest growing channels which generated rising traffic for its website last year. [4] Additionally, last month Expedia signed a long term global agreement with Accor, which is a leading hotel operator in Europe.

The aggressive market campaign is just another point in case reflecting Expedia’s focus on tapping growth potential in the European travel market. In our view, a higher share in the European online travel market will augur well for Expedia’s valuation.

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Our price estimate of $69 for Expedia is at a premium of over 20% to the current market price.

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Notes:
  1. Priceline, Travelocity take steps to increase share, Travel Weekly, February 5, 2013 []
  2. Booking.com big for Priceline but only scratching the surface in Europe, Tnooz, February 29, 2012 []
  3. Online Travel Sales Explode in Latin America, eMarketer, November 20, 2012 []
  4. Expedia pays $632 million for majority stake in Trivago, let the travel search games begin, Tnooz, December 21, 2012 []
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  • commented 1 years ago
  • tags: TZOO TRIP EXPE PCLN
  • Check it out.