hotels.com, a unit of Expedia Inc., ¬†has been in Latin America since 2004, and opened a Sao Paulo office about a year and a half ago.
But Expedia Inc.’s presence in the region should be ratcheted up greatly over the next year as the fooprint expands from a couple of people when the Sao Paulo office opened to a staff of about 40 by the end of 2011.
This build-up will occur as hotels.com invests in marketing, enlarging its affiliate network and expanding its hotel supply to emphasize domestic travel in Latin American countries, says Nigel Pocklington, the hotels.com global vice president of marketing and strategy.
The hotels.com business in the lead markets of Brazil and Mexico are becoming material to the company’s bottom line and hotels.com sees a “deep opportunity” in Latin America, Pocklington says.
“We’re not as big as what we’d like to be and want to get much bigger,” he says.
hotels.com has been key to Expedia Inc.’s international expansion strategy because of the platform’s ease in handling multiple languages and due to the fact that entering a country with hotels faces fewer regulatory hurdles than moving in with flights, Pocklington says.
Thus, while Expedia has around 20 sites globally, hotels.com has 76, including a presence in Brazil, Mexico, Argentina, Colombia, Venezuela and other sites in Latin America.
The hotels.com focus in Latin America is to build both outbound and domestic travel markets, and for the latter that means expanding its hotel relationships.
In Brazil and Mexico, the hotels.com team approaches properties with three business models — the merchant model, prepay and Expedia Easy Manage, an agency model where guests pay at the hotel and then hotels.com collects a commission.
While the merchant model is appropriate for chains in large cities and resort areas, EEM is emphasized elsewhere because it is easy to scale.
When Expedia announced last week that it signed a new partner, WPP Group, to lead the hotels.com marketing efforts in Latin America, a WPP official in Mexico said there are two prime challenges, “first, overcoming the resistance to change from the consumer, and second, maintaining results commensurate to the fast growth of our client.”
Pocklington concurred that hurdles include giving travelers in Latin America the confidence to book online and “unpackaging the packaged holiday.”
Patricia Rasore, PhoCusWright’s Latin America director, says hotels.com has done a good job of customizing content for the Brazilian market, pointing to the country-specific website, use of local currency and language, as well as its¬†Desempacotando Rio de Janeiro [Unpackaging Rio de Janeiro] blog.
In fact, Rasore notes that Hoteis.com uses Brazilian travel writer and publicist¬†Ricardo Freire to spread the message about the supposed advantages of uncoupling a pre-packaged vacation.
Here’s a Hoteis.com video, featuring Freire, as he tries to shatter myths about the alleged advantages of pre-packaged holidays.
hoteis.com faces formidable competitors, including Booking.com, which has been more aggressive in the region, as well package operator CVC, which is expected to do some $1 billion in gross bookings, predominantly in Brazil, in 2010.
Booking.com has a regional headquarters in Brazil, and has opened an office in Argentina, as well.
Among Booking.com’s initiatives in the region, it has offered a booking engine for independent hotels, and has wooed travel agencies with a commission program.