NEW YORK (Reuters) - Growth in online travel bookings is rapidly shifting overseas, leading to a race to bolster operations in Asia and Latin America, the chief executives of two top online travel companies said on Monday.
Speaking at the Reuters Travel and Leisure Summit, Dara Khosrowshahi of Expedia Inc (EXPE.O) and Jeffery Boyd of Priceline.com (PCLN.O) agreed that overseas growth is fundamental to their business strategies.
Khosrowshahi, the 40-year-old leader of the largest online travel agency, said he expects non-U.S. bookings to account for at least half of Expedia’s business within five years, up from 37 percent currently.
“Europe is a great market for us. And for us, the Asia-Pacific and Latin American markets are new emerging markets,” he said.
The value of the company’s bookings rose 26 percent year-over-year in the fourth quarter of 2009. International bookings increased 38 percent. Domestic bookings increased 19 percent.
Asia-Pacific and Latin American markets account for about 5 percent of the total value of Expedia’s bookings, but the company hopes to double that in the next couple of years, Khosrowshahi said.
“We’re aggressively investing in China and Australia, India and Brazil,” he said.
His rival, Boyd, 53, said about two-thirds of Priceline’s bookings are non-U.S.
Priceline, which made its name with its name-your-own-price auction, saw gross bookings growth of 52.9 percent year-over-year in the fourth quarter.
International bookings were up 81 percent. Domestic bookings grew 20.6 percent.
“The international markets are less mature. The online market is less well-developed. Competition is not as far ahead as it is here in the United States,” Boyd said.
He also noted that the hotel business is more fragmented in international markets.
“We expect to have higher growth in the international markets, from new markets like Asia that are less well-penetrated and are currently enjoying higher levels of economic growth,” Boyd said.
Corporate travel demand is up after a painful recession, but companies likely will curb travel expenses and steer employees away from costly first-class accommodation, Khosrowshahi said.
“The phones are ringing again, from what the partners tell us,” he said. “Again, it is off of a very low base, but we do see some encouraging signs from our hotel partners.”
He said that while demand is improving, U.S. companies remain conservative in their travel spending and are adhering more closely to internal travel policies that may have been neglected in recent years.
The travel industry has been hit in the past year by an economic downturn that eroded travel demand. Travel companies responded by slashing fees and offering promotions to bolster bookings.
Boyd said the online travel business was recovering from a recession that saw the erosion of travel demand.
“We probably have seen the beginning of a recovery in business travel already, at least according to what the hotels are saying,” he said.
Reporting by Kyle Peterson; additional reporting by Deepa Seetharaman, Martin Howell and Karen Jacobs; editing by Derek Caney, John Wallace, Phil Berlowitz