Transport Pricing Quiz

1)      What was Air GBV compared to Lodging in 2019?

• The same

• Much bigger: x3

• Half

• About 1/10, Air is really smaller

Answer explanation

Air represented almost 24 billion GBV in 2019, which is half the size of lodging.

But in H1 2022 it is now around 1/3 of Lodging GBV.

2) Can you guess how many transactions per day we have in Air in 2022

• Almost 1 million

• Between 80 000 and 120 000

• Exactly 204 678

• Around 50 000

Answer explanation

For the first half of the year we can see that we have on average 100 000 txn per day in Air with big variation depending on day of week.

Peak days are Tuesdays and lowest days are Sundays

3) Now looking at GP, do you know what are AIR GP and CAR GP in 2022?

• AIR is 10% and CAR is 5%

• AIR is 1% and CAR is 5%

• AIR is 10% and CAR is 15%

• AIR is 1% and CAR is 15%

Answer explanation

In H1 2022, CAR GP is 13% of GBV, while AIR GP is only at 1%.

In 2019, we had CAR GP at 15% of GBV and AIR GP at 2%.

4) As you might know, a lot of value comes from Expedia customer repeating travel shopping.

What is ‘attach definition’ at EG?

• When we attach different people from the same family together in one booking reference

• The 2nd purchase on the app when the traveler has already bought a product on the website

• I don't know, I'll have a look at 'Expedia dictionary'

• The booking made by the same traveler after an existing purchase within 270 days and with

  travel dates between +/- 3 days of base booking

5) How much attach value can we drive from Air?

• $2 per ticket

• $5 per ticket

• $10 per ticket

• $20 per ticket

Answer explanation

In 2022, on average one Air ticket brings $10 attach:

$4 in Hotel

$4 in Insurance

$1 in Cars

$1 in combined items

6) What type of pricing treatment do we apply in transport?

• Fee + Markup

• Fee + Margin cap + Markup

• Fee + Subpub + Markup

• Fee + Margin cap + Subpub + Markup

Answer explanation

Currently we apply Fee and Markup. Subpub were disabled but we aim to reinstate Subpub as part of the Air CRA project

7) How can we decide between applying markup or fee?

It depends on...

• The type of fare Expedia receives

• The expected GP (profitability guidelines)

• The airlines and car vendors contracts

• The countries

Answer explanation

It depends on the type of fare we get from Airlines and Car vendors.

In Air we can on apply fees on published fares, and markups on net fares

In car we can only apply markup on merchant fares.

8) What is our pricing treatment scope in Switzerland for Air?

• 10% of txn have pricing treatment

• 25% of txn have pricing treatment

• 50% of txn have pricing treatment

• 100% of txn have pricing treatment

Answer explanation

In POSA Switzerland we apply: - markups on package and naked net fares, like other EMEA countries

- fees on all published fares because this market is an exception as being pricing inelastic

9) When you rent a car you generally have 2 payment options: Pay Now or Pay Later

How does this choice translate for our pricing possibilities?

• Pay Now, so Expedia can apply a commission,

  Pay Later, so Expedia can apply a markup

• It does not impact the pricing options, we can put commission or markup whatever the situation

• Pay Later means Expedia can add a commission,

  Pay Now we can add a markup and/or commission

• Pay Now is generally cheaper because we don't do any price adjustment

Answer explanation

- When the Pay Later / Postpaid option is chosen, the traveler will pay directly the car supplier. We are in the agency model and so we can only use commission

- When the Pay Now /Prepay option is chosen, Expedia collects the money. We are merchant and in that situation have a variety of options: markup, commission and the combination of the two.

10) Could you guess what is the market split of Car sold as part of a Package at Expedia?

• NORAM - 80%

  EMEA - 10%

  LATAM - 5%

  APAC - 5%

• NORAM - 95%

  EMEA - 5%

  LATAM - 0%

  APAC - 0%

• NORAM - 75%

  EMEA - 20%

  LATAM - 5%

  APAC - 0%

• NORAM - 25%

  EMEA - 25%

  LATAM - 25%

  APAC - 25%

Answer explanation

AMER, mainly POSA US, is by very far the biggest market for car sold in a Package.

That is also where we see the major opportunity for pricing optimization, such as...F+C dynamic markup testing :)