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Expedia Launches Rewards Program Across Brands, Including Vrbo

2023-07-17 19:15
Expedia Group Inc. is launching a long-awaited loyalty program across three of its flagship brands, capitalizing on a
Expedia Launches Rewards Program Across Brands, Including Vrbo

Expedia Group Inc. is launching a long-awaited loyalty program across three of its flagship brands, capitalizing on a global travel boom amid increasing competition from Google and Booking Holdings Inc.

The new offering, called One Key, will allow travelers to use and earn rewards across the platform, for example, building up points on vacation-rental platform Vrbo and use them to book a flight on Expedia.com or a room on Hotels.com. People in the US who have rewards from earlier Expedia programs, including Hotels.com stamps, will have them automatically converted to OneKeyCash, which can be used across Expedia’s marketplace, including for car rentals, cruises and activities. The program is starting in the US and will roll out globally beginning in 2024, Expedia said.

“It’s about making travel rewards simple for everyone, not just because it’s sunny, a Tuesday, and the planets are miraculously in alignment,” Jon Gieselman, president of Expedia brands, said in a statement Monday. He said the program was designed to “reward every traveler,” from road warriors to frequent fliers and the 83% of tourists who only take a few trips a year and never really benefit from other loyalty programs.

One Key arrives amid what the travel industry expects to be a busy summer and in anticipation that business travel is also making a comeback after Covid-19 killed work trips. With the US and other parts of the globe emerging from the depths of the pandemic, consumers are prioritizing experiences and travel even as inflation cuts into discretionary spending. Airlines are expecting a record number of passengers this summer, and Delta Air Lines Inc., which reported better-than-expected profit and boosted full-year expectations last week, said “there is significant growth yet ahead” in travel demand.

Expedia joins a crowded market of travel loyalty programs dominated by credit card companies, airlines and major hotel chains. Some, such as United Airlines’ MileagePlus, allow customers to use rewards on flights and accommodations. Booking’s Genius loyalty program also offers discounts to members, upgrades and priority support, but it doesn’t work across its other brands like Priceline, Agoda or Kayak.

The key rival for Expedia’s Vrbo brand, Airbnb Inc., doesn’t currently have a loyalty program, although Chief Executive Officer Brian Chesky has said recently it has been on his mind “for years.”

Expedia has touted the benefits of unifying its loyalty program since at least 2021, but the technological streamlining behind the scenes has made the process difficult and could come at a short-term cost, including losing some market share to Airbnb, said Wells Fargo analyst Ken Gawrelski.

In the long run, Expedia Chief Executive Officer Peter Kern has said he expects the unified platform to help drive efficiencies later this year.

Expedia competes with Google, which has its own travel site, and Booking, which has increasingly deployed discounts and coupons to woo and customers. But it has signaled plans to spend more to capitalize on the pandemic recovery and ramp up gross bookings and increase customer retention. Analyst estimates compiled by Bloomberg suggest Expedia has spent a record $1.83 billion in marketing expenses during the second quarter — more than any pre-summer period before the pandemic.

“If they want to drive penetration of the One Key loyalty program across their brands, it will be important for Expedia to invest behind that,” Gawrelski said.