February 13, 2008 / 12:26 AM / 11 years ago

Online travel agencies focused overseas

LOS ANGELES (Reuters) - Online travel agencies, eager to expand their reach in an increasingly electronic world, have set their sights on international markets where travelers are not yet accustomed to booking trips online.

Priceline Chief Executive Officer Jeff Boyd is interviewed at the Reuters Hotels and Casinos Summit in Los Angeles, California February 11, 2008. REUTERS/Phil McCarten

Chief executives at the three largest publicly traded online travel agencies (OTAs) — Expedia Inc, Priceline.com Inc and Orbitz Worldwide — said at the Reuters Travel and Leisure Summit in Los Angeles this week that they aim to capture the largest possible chunk of those budding markets.

“The Asia-Pacific market is the biggest market that we’re looking at,” said Expedia CEO Dara Khosrowshahi. China and India are the most tempting geographic targets, he said.

Expedia’s Asia-Pacific division oversees the company’s expansion in Asia. Expedia, the largest OTA, has a majority stake in eLong, which provides online travel services in China.

Expedia saw 34 percent of its fourth-quarter bookings from international points of sale.

With growth in online travel bookings slowing in the United States, OTAs must look overseas for growth opportunities.

The task is complicated somewhat by slower Internet penetration in Europe and Asia and by the relatively small number of large hotel chains on those continents.

Despite these hurdles, U.S.-based OTAs have established some degree of traction internationally largely through acquisitions.

Orbitz, which became a publicly traded company last year, has focused aggressively on expansion in Europe, most notably by way of ebookers.com, which is part of the Orbitz brand portfolio.

“We have a very broad footprint with the businesses we have today,” said Orbitz CEO Steve Barnhart.

Barnhart has said the company plans to grow its international brands and invest in global technology improvements. Last year, Orbitz launched a new technology platform for ebookers in the United Kingdom. The platform is intended to sustain improvements in other European operations.

Khosrowshahi said Internet penetration in Europe is about 30 percent, meaning there is still plenty of room for growth.

“And everything we see about Europe is that it looks like the U.S. did four to five years ago,” he said.

Priceline CEO Jeffery Boyd said globalization itself is the primary driver of online travel bookings around the world. He said the number of travel bookings between Europe and Asia is increasing.

Priceline.com operates growing European hotel reservation services through several brands, including Activehotels.com and priceline.com.uk. The company also is an investor in an Asian travel service, which bears the name Priceline.

(For summit blog: summitnotebook.reuters.com/)

Editing by Tim Dobbyn

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