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Expedia and AirAsia: Glorified White Label, or the Real Deal?April 11, 2011 By: George Dooley Travel Agent
Expedia may be the world’s largest online travel agency (OTA) in terms of gross bookings but, in many markets around the world, it is a decidedly tier-two player, says research firm PhoCusWright in its latest FYI post examining Expedia’s recent joint-venture agreement with AirAsia.
The move, says PhoCus Wright, gives Expedia new clout in fast-growing markets and has the potential to be a game-changing move, despite competition. In its blog entry, the firm argues that growth in the Asia-Pacific region is particularly untapped and its fast-growing travel market is ripe for online travel agency business.
Excerpts from the blog read:
“The partnership with one of Asia’s leading LCCs [low-cost carriers] is a big win for Expedia. It could be the much-needed impetus the OTA has been seeking to expand within the region. Securing exclusive online third-party distribution rights with AirAsia—especially for markets where the LCC is growing abundantly—gives Expedia a strong hand indeed, and certainly puts other OTAs [online travel agencies] on the defensive.”
“This JV [joint venture] brings together two great brands, but it does not necessarily mean they will work great together. Expedia’s global OTA leadership is not questioned, but it has a mixed record in international expansion. AirAsia certainly knows its market, but it is an airline, not an OTA. It may have strong positioning in APAC [Asia-Pacific], but it is presently bustling with network expansion, upcoming public offerings, plus the launch of a new airline in the Philippines.”
To read more of PhoCus Wright’s take on the AirAsia-Expedia joint venture, visit www.phocuswright.com.