AI is poised to disrupt the travel industry, and Rathi Murthy, CTO at Expedia, who oversees a huge online travel network with 168 million loyalty members and more than 50,000 business partners, believes his company is well positioned to capitalize.
That’s because, outside of its core brands, which include Travelocity, VRBO, Hotels.com, Orbitz, Trivago, Wotif, and CarRentals.com, the $14 billion online travel services’ most valuable asset is its data, the 70 petabytes of traveler information stored on its AWS cloud.
Data is our heartbeat, says Murthy, who joined Expedia Group as CTO and president of Expedia Product and Technology two years ago after serving as Verizon Media’s CTO during the development of 5G. We have a very large ecosystem and with what we’ve been able to do is really drive personalized behaviors for our travellers.
And with the expansion and consumer popularization of AI fueled by recent advancements like ChatGPT, Expedia’s extensive use of analytics and machine learning to fuel that personalization strategy should enable the company to help move the travel industry forward, even as its customer and partner pool grows. Murty says.
AI is a huge enabler for us. That’s nothing new to us, but ChatGPT democratizes AI for everyone and bringing the two data together and AI is very powerful, he says, noting that Expedia currently runs about 600 billion AI predictions a year from its massive data archive. .
Transformation on two fronts
The Seattle-based travel giant has come a long way since it was founded as a division of Microsoft in 1996 and spun off as a public company in 1999. Expedia Group has more than 21 brands and more than 50,000 B2B partners who connect them with more than 3 million hotels and rental properties and more than 500 airlines and cruise lines as well as car rental agencies.
Still, online travel service has strong upside potential, Murthy says, estimating that only 20 percent of all travel professionals and consumers use online systems today to book reservations.
According to numbers from 6sense Revenue AI, Expedia has about a 10% share of the online booking and reservations market and competes with more than 20 rivals, including TripAdvisor, which has a 46% share of all revenue; Airbnb, which takes 23%; and Booking.com, which has about 7% of the online booking market.
To help Expedia capitalize on the potential of online travel bookings, Murthy devised a two-pronged approach to top competitors and continues to grow Expedia’s revenue, which exceeded $12 billion in 2022.
His core strategy consists of two distinct but related transformations: the ongoing internal transformation of Expedia’s infrastructure into a unified and integrated manner, and leading the transformation of the online travel industry itself, says the CTO.
The travel industry is full of legacy [technology and processes] and not everyone has the strengths and technology capabilities that we do, he says, noting that Expedia is trying to position itself as the travel industry’s foundational platform on which to help digitize travel agencies and bring them into the online fold.
It’s not just about transforming ourselves. It’s transforming the travel industry, he says. Online travel agencies make up about 20% of the travel market, so there are 80% belong to small players, offline players, airlines, hotel chains, direct bookings, etc.
Expedia Group methodically developed a multi-stage plan for its digital transformation and began moving workloads to the AWS Cloud in 2017 before Murthys arrived. Now, more than 90% of the company’s data is stored on AWS, he says.
Murthy’s mission comes at a very opportune time when the commercial availability of artificial intelligence is exploding and reaching out to ordinary consumers. To date, AI platforms have predominantly been used within enterprises to build machine learning models by data scientists, software engineers, and IT experts. But more and more SaaS vendors are incorporating conversational AI tools like chatbots, as well as generative AI models enabled by platforms like OpenAI’s ChatGPT, to democratize AI as a service that any consumer can use.
That consumerization of AI is a trend Murthy keeps an eye on, seeing it as something that will fuel more personalization opportunities in the travel industry.
Embrace the opportunity
To that end, Expedia recently incorporated two OpenAI plug-ins to expand its conversational capabilities for travelers within ChatGPT and the Expedia service itself.
One implementation is the Expedia ChatGPT Plugin which allows users who start planning a trip on ChatGPT to select the Expedia Plugin to bring that trip to life, giving them a seamless booking experience on Expedia. says Murthy. The other plug-in resides within the Expedia application and allows travelers to have conversation skills about all aspects of trip planning and save the hotels recommended in that conversation to a new trip so they can easily return back and build your own trip. It is currently available on iOS devices in English.
Marry ChatGPT data [such as questions from travelers] with Expedia’s specific travel data such as traveler preferences, booking patterns and price availability is super powerful, says the CTO, adding that the combination of technologies can create a complete itinerary for consumers. We saw a lot of traffic. It was great in terms of planning the trip.
The Expedia team was able to roll out the plug-ins within three to four weeks. That’s actually because we were so mature in our AI capabilities and APIs in our travel platform, says Murthy.
Others are rapidly incorporating ChatGPT and the GPT API into their services and applications, including multinational CPG Unilever and multi-channel used car retailer CarMax.
But analysts suggest that these early implementations of generative AI still have a long way to go before making a significant impact.
At this early stage, the ChatGPT feature within the Expedia app is limited. It does not have access to real-time price information and users are unable to book through the feature. It also only saves hotel recommendations currently in the travel section of the Expedia app, says Brad Jashinsky, lead analyst on the Gartner for Marketers practice.
Jashinsky also cautions that it’s not a certainty that consumers will use chat-based AI systems to travel in conjunction with any online reservation system, but if so, it could differentiate Expedia’s experience from other online travel agencies.
IDC analyst Dorothy Creamer suggests Expedia is well positioned for the AI era if the company works closely with partners.
Expedia is building its data platform on 25 years of travel and booking behavior, and this level and depth of data is critical to driving a more personalized travel and booking experience in the post-pandemic era, Creamer says, noting that l The company is also building a deep bank of data scientists to help extract value from booking data, these data points require evaluating thousands of permutations for a single page of booking information.
Creamer also notes that Expedia’s products are designed to provide hotels, airlines, rental car agencies and other partners with the building blocks to process in-depth customer information and combine it with actual traveler behavior. This will require the sophisticated data analytics that AI and ML-powered functions and platforms can provide, she says.
However, Expedia’s Murthy remains fully aware of the ethical concerns surrounding AI and wants to ensure that Expedia is a free and fair marketplace for all users.
We’re keeping a very close eye on its governance and ethics, and making sure there are privacy considerations around sharing any information, Murthy says. This is something we all need to pay attention to and work together as a hands-on community to use AI forever and make sure we can use best practices across the industry.
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