Expedia, the world’s largest online travel agency by gross travel sales in 2019, has closed a legacy but once an important part of its tours and activities business: the offline Local Expert concierge business in Hawaii and Orlando, Fla.
The reason shouldn’t come as a surprise.
“COVID-19 has put additional stress on our business and the entire travel industry, so it should, unfortunately, be no surprise that there have been changes to our activities business,” said Kasia Jawien, director of account management for activities at Expedia. “Given the state of the business and industry, we are shutting down the offline concierge activities business, specifically our Local Expert operations in Hawaii and Orlando.”
Still committed to online activities.
Jawien emphasized that despite the close of the offline unit, the company is still very much in the online tours and activities business.
“We remain committed to the activities sector and will continue to offer activities for purchase online,” she said. “Activities remain an integral part of our total global business and our core promise of delivering exceptional online user experiences.”
Jawien indicated that Expedia is focused on working with its existing tour and activity operator partners for their online business and adding supply through new sources. A new partnership with Viator, a competing OTA, is an example.
Sources have told Arival that Expedia would be retiring the Local Expert brand as part of the overall restructuring the company has been undertaking – a restructuring that was initiated pre-pandemic by the new CEO Peter Kern.
Expedia was one of the first in tours and activities.
Expedia was the first major OTA to invest in building its tours and activities division. After working with Viator in the early 2000s, Expedia acquired Maui-based concierge desk operator Activity World in 2004, later rebranded as Expedia!Fun. Then in 2006, it rebranded again to Expedia Local Expert.
The offline division of Expedia Local Expert, which had been the industry trade name for the company’s tours and activities business, had long represented a significant share of the unit’s sales. Expedia had previously disclosed that its tours and activities sales exceeded $500 million in 2018.
The company had long sought to transform Local Expert into an online business. However, the offline concierge business had remained a substantial portion of its tours and activities sales. Although they never broke out offline and online sales, sources with knowledge of the business said the offline division represented as much as half of Expedia’s activities sales.
Expedia had been making changes to its activities business before the pandemic, including staff reductions and other steps to streamline the business. One area apparently was in inventory sourcing. Expedia inked a surprise deal with competitor OTA Viator to source inventory in select markets to supplement their existing contracted supply.
One operator, Maria Rasouli, founder of Escape Bicycle Tours in Ottawa, Canada, was surprised to learn that her Local Expert listings were now being sourced from Viator.
“A friend was randomly looking for my product and told me about it. I then checked and was surprised,” said Rasouli, who was frustrated at the lack of notification from either Expedia or Viator.
Jawien declined to provide details about the partnership at this time but said that “we are always looking at ways to acquire the best activities supply onto our sites to complement the thousands of activities we already offer to travelers. Right now, we are focused on supporting existing activity partners while the travel industry recovers.”
With extraordinary pressure on all travel businesses amid the pandemic, operators should expect only more partnerships such as this, as companies take steps to reduce costs and streamline operations until travel resumes. OTAs, who are hit as hard as operators due to travel’s shutdown, have had to reduce staff, scale back customer service, and pull back from markets less important to the core business.
We have reached out to Expedia for more information and what it means for operators currently listing on the platform. Stay tuned to this article for updates.