Expedia chief relishes daily corporate battle to fight to expand and evolve in travel sector

Dara Khosrowshahi, the CEO of Expedia Inc, says he didn't realize how much he would love it, when he first joined the company 11 year ago.

Under his leadership, the global leader in the online travel industry has grown to more than 18,000 employees with $6.6 billion in annual revenue. In addition to Expedia.com, its brands include Orbitz, Travelocity, Trivago, Hotels.com, Hotwire and many others.

In China, Expedia ended its 10-and-a-half year relationship with eLong on May 22, 2015, by selling its 62.4 percent stake in the company to investors, including Ctrip. Khosrowshahi says the eLong sale did not mean Expedia was giving up on the battle to succeed in China's market. Rather, it was just a shift in strategy.

Expedia and Ctrip have agreed to cooperate with each other to allow their respective customers to benefit from certain travel product offerings. It also recently launched a China-specific Expedia website in the mainland (www.expedia.cn). Both are efforts by Expedia to tap the Chinese outward bound market through aggressive investments and partnerships.

"We sell the best product in the world so it is so easy to be passionate about it," he said. "I love the product, I love technology and I love the company's global nature. I'm as excited as I could be."

Khosrowshahi recently spoke to China Daily about his China strategy, leadership and personal life. The following are edited excerpts of that interview.

How do you see China's online travel business and the future of the market?

If you talk about China and online, you have to talk about mobile. How quickly it has gone mobile; how quickly it has gone to the app. For us, the particular focus in China is going to be on China outbound. We have a partnership with Ctrip on the package side. We want to use our inventory of more than 300,000 hotels worldwide and make it available either on agency or package rates, and pipe it to all of our Chinese local partners to really make that inventory available to Chinese consumers who are looking to travel all over the world.

What's the biggest difference between the China market and the US market? What are the challenges in the China market?

I think the China market has been much more competitive on the discounting front because it has been growing so fast. China is behind the US as far as consolidation goes. The destructive price wars between Didi and Uber drove consolidation. That is something that China is right in the middle of now, but which has already happened in the US. That is one significant difference. Another significant difference is that China is ahead of the US with mobile penetration and especially app penetration. And the structure of the Chinese apps, which are fully packaged, is a very different architecture from US apps that tend to be for single use. The challenge for Western companies is to be relevant to local Chinese consumers, who are very savvy, understand a lot about service, are very demanding and want the service the way they want it. So we do think that to address China, we have to do it not only with a great product, but also though partnership. And we are committed to both.

It is interesting that you and Ctrip used to be competitors in China, but now you are partners. What is Expedia's strategy in China?

Obviously there is a big domestic market and a big outbound market in China. I think companies have to be honest and realistic about their strengths. Local Chinese players can be stronger in competing for the local Chinese travel, versus Western players who try to build to compete in the Chinese local market. So we look for a local partner. We have known Ctrip for a long time, and they are the top player in China, so we decided to sell eLong to them. Acquiring eLong was attractive for Ctrip because competition for the domestic market was getting fairly unprofitable for all the players.

As a part of the sale we had a commercial agreement with them to power their outbound travel, especially on the package side. Now a significant amount of Chinese outbound travel is on travel packages. So our strategy is to focus on the outbound, and we think it is a good strategy. We are in an early stage, and we are very optimistic about where it will take us. Companies should focus on where they can have value. We think we add significant value for the Chinese outbound customer, and we are going to focus on that market.

What is your corporate culture?

We have a set of cultural norms. One of our norms is transparency. It is the kind of company we want to be. When you move up and up, you know less and less about what is really going on because people are afraid of being honest with you. So our strategy is to be brutally honest with our employees. We are very transparent about what is going on at the company, and they are free to be transparent and talk back to us. We build a culture where people can be themselves, can be successful and can really operate without fear.

What is your management style? Are you a tough leader?

I would say yes and no. You have to have different management styles based on the situation that you are in. The company is doing really well, and we've been doing really well over the past five years. But it is a manager's job to guard against complacency, to be tougher. So people don't get overconfident, so they don't get blinded by their own success or miss something. And through the tough times, I will ask tough questions. But if I think that you are right person to take on a task, I will encourage you, coach you and cheer you on.

What has your biggest achievement been as Expedia's CEO?

I love the culture of the company. The company is becoming something special. What I love about the company is that it is a place where you can be your real self, your truthful self, and you can succeed with your own style. It is a very transparent, open company and different people can succeed in different ways here.

This is a company where the power comes from the idea, not from your title. It is a very data-driven company. Everyone's idea is equal in the company.

What are your life and business philosophies?

Keep it simple. Business people tend to over-complicate situations. Simplify things. To simplify what you are good at and what you should focus on is a real test of a company. I tell people a lot that the best strategy isn't what you are going to do, but it is what you are not going to do. Personal life is the same thing. Know what makes you happy and stick to it. Forget about everything else.

How do you handle hardships and setbacks?

I like the hardships and setbacks. I am not the kind of person to go on a beach vacation. For my honeymoon we went trekking to see gorillas. I like a challenge. If you look what the company has accomplished during the past 11 years, and hopefully what we will accomplish in the next couple of years, no-one can accuse this company of riding a wave. We have fought for every inch and every success. Everyone here has been together and incredibly close. That is because we have been through a lot of battles and I think that's what shapes you as a person. So I love the fight, and I love the hardships. They are what make me tick.

What are your hobbies? How do you spend your time off duty?

I have four children and they take a very significant amount of my time off duty, which I am very happy to do and which is great. Travel for me and my wife Sydney is a real passion. She loves going anywhere and everywhere. So we do travel. And when I have time on hand, I play some computer games. I am a computer geek at heart. I try to get the odd hour to play strategy games.

lindadeng@chinadailyusa.com