The two of us barely had time to breathe in between drinking, eating our bowl of Ipoh Hor Fun noodles, chatting about Expedia’s grand plan to conquer the region as well as talking about everything that’s going on in the digital world before Lynn had to go to the airport to fly to Kuala Lumpur on AirAsia and stay at Tune Hotel.

Phew.

Clearly, Lynn’s a man on a mission – he’s heading an aggressive roll-out of Expedia sites across the region.

Expedia.com.sg had its soft launch couple of months ago and Lynn says it’s doing 1,500 transactions a month without much marketing effort. It will start doing some public relations this week, and add flights and packages by July.

Lynn’s about to appoint a general manager to head the business – it wasn’t easy to find someone, he said. Someone who could be aggressive without being offensive, someone who could fit into a corporation yet work like an entrepreneur, someone who knows about digital, although not necessarily travel – he says he is close to appointing someone so watch this space.

It’s launched in India and has done some brand marketing there already. There, it’s a full service model.

By April 1, it will launch in Malaysia and it will be a dual-language site in English and Bahasa Malaysia. Although it could just as easily have launched in English only, Lynn said he thought he might as well add Malay “since we are already investing in it and we want to prepare for the future when a Malay-speaking generation emerges in Malaysia”.

“It will be a small part of the business, under 10% probably, but not everybody is offering it and it will be worth it in the long run.”

It will launch with hotels first, then airlines later. 

After Malaysia, it will launch in Thailand and South Korea – possibly within the first half of the year. “It will take longer to add flights in Korea because the GDS market there is very different but in Thailand, we expect to go full service by this year.”

Then in the second half of the year, it will add another four to five sites – with Indonesia, a priority. 

Lynn expects the Indonesian market to be the one “that surprises us”. Either it could outperform expectations by 10 times or underperform, whatever, that market is an exciting one, he said. 

“It’s difficult to get flights in there because the low cost carriers don’t participate but Indonesia has the potential to surprise us,” he said.

Other markets on his radar are Vietnam, Hong Kong and Taiwan. “Vietnam will take a long time but we might as well start,” said Lynn.

Of the markets it will be launching in, attention will be focused on Singapore, Malaysia and Thailand. “Estimates are that online travel in Singapore and Malaysia is worth US$1.5 billion each, compared to US$5.5billion in India – so this region is not that far behind India.”

Asked why Expedia had decided to do its own launches and grow organically versus acquisitions, Lynn said, “Honestly, if you acquire, you end up with two different front end sets of technology so whenever you come up with something good, you got to do it twice.

“I think it’s smoother going forward, growing organically on one platform and then localizing for each market.”
Anyway, he said, who could you buy that covered South-east Asia? Agoda is owned by Priceline and “there’ve been no significant investments in ZUJI so far. It seemed easier to do it organically if you are prepared to commit to it.”

Lynn has been given the mandate by headquarters not to “over-analyse and research the market, but to just do it, test, fail, try again” and “not to blow the bank balance on one idea”. 

He didn’t disclose the war chest he’s been given but said that in Singapore, he would have US$10 million to spend over two years, most of it on marketing, a chunk to put a team in a place and a small part, about $500,000, on technology.

Currently, Expedia’s business in the region is split 45% Australia/New Zealand, 45% Japan and 10% India. In three to four years time, he expects the split to be roughly 20% Australia/New Zealand, 30% Japan, 30% South-east Asia and 20% India. 

“South-east Asia could be bigger than India and as big as Japan,” he said.

He said the outlook for online travel in 2011 was positive. “I can’t think of one market that I am depressed about.”

For him, it’s an exciting time to be launching in Asia with all the new developments taking place in the market – from the growing shift of offline to online, the explosion in smartphones and the buoyant Asian economy.

He admits Expedia is a bit late into the market. “We made a mistake in not doing it a couple of years ago but I am glad we are doing it now.”

Having said that, he added that in some markets, like Malaysia and Indonesia, now might actually be the better time to launch. Plus, the conversation has also changed from two years ago to now. For example, there are some people who are asking “Is there even a need for a website these days?”

Lynn believes that even with the explosion of smartphones, the same fundamentals will still be needed, just that it has accelerated the need for mobile. 

“Now we are asking, how do we get South-east Asia as close to launch with a mobile web and mobile app at the same time. For example, in South Korea, can we launch there with mobile web and mobile app as close as we can?

“Social media is also a bigger part of the conversation now. A year ago, it was about Twitter but now, it’s more about Facebook which has been able to demonstrate some real business results for some brands.”

Expedia’s only getting started in social media, said Lynn. In Australia, it launched its Facebook page five weeks ago and “we decided the general manager would launch it and run it for the first few months”.

“It’s a good way to get to know your customers. We launched a competition to get customers to become “guest admins” and whoever gets the most likes will win a travel prize.”

As for foursquare, Lynn feels it’s missed the boat. “Unfortunately for them, it’s a declining valuation story. Facebook Places and Google coming into this sector have changed the game. Location-based services will be huge but working within an existing network makes more sense.”

So does that mean that all roads then lead to the Big Three – Google, Facebook and TripAdvisor?

“Isn’t it always the same? Look at years ago when it was Microsoft and then Google came along to disrupt it. It’s always about dominance by a few until something transformative and profound comes along to disrupt it.”

Lynn says he has no doubt something else will come along. “If I knew what, I wouldn’t be sitting here, but it could be location-based.”

Over iced coffee, the conversation moved to Groupon’s bulk buying model. “I think they expand the travel market – you might find yourself going on a trip you hadn’t planned to because you bought some hotel vouchers.”

Everyone’s jumping onto the bandwagon, he said, with now possibly 66 clones in the US alone. “TripAdvisor is experimenting with daily deals. We do our 72-hour sales but we feature more than one property. I don’t see it replacing the fundamental business model.”

Lynn also said that compared with two years ago, content in South-east Asia is now more open and it allows players like Expedia to get access to local content without having to tie up with local offline agencies.

“I think it’s less of an old boy’s network now,” he said, “where content was in the hands of a few.”

On commissions, he said that Expedia was also taking a more matured approach in the region and is offering a menu of options so that local hoteliers could decide which model suits them best.

“Instead of saying, this is how Expedia works, we now have more graduated options where you can access global distribution or regional or local. Since we started offering these options, our hotel sign-up rate has been increasing well.”

On who are the travel brands he respects, Lynn cites Agoda for “their brutal focus on small incremental improvements on conversions”, AirAsia for “developing a product loved by customers and their leverage of social media”, IndiGo Airlines for “their longterm marketing approach and not beating up on cheap, cheap flights but building association with the modern traveler” andCleartrip for “simplicity of user experience and invesments in new, innovative things – two thirds of which may not work but at least they are trying”.

Discussing Cleartrip’s new brand campaign, “Travel With a Purpose”, Lynn said Expedia’s branding proposition would revolve around “simplicity, widest range, best prices of packages and assurance of buying from the world’s biggest travel agency”.

“We want to invest in quality – not just in the booking but the travel experience. We get travel and we know travel doesn’t end after you click buy.”

He said, “There’s a lot of talk about how far OTAs should get into the travel cycle – should we get into inspiration? But let’s nail the travel piece post-booking first.”

Once you do that, you get a loyal customer and that’s when his planned loyalty programme will come in.

Details of which will have to wait for our next catch-up, said Lynn, as he hops into a taxi to catch his flight.

Phew.