On Wednesday, the company announced that it has agreed to acquire the assets of closely held corporate travel company Metropolitan Travel for an undisclosed cash sum. Seattle-based Metropolitan Travel, which counts Starbucks and Nordstrom among its customers, will serve as the foundation for Expedia's new corporate travel services, company officials said.
"To date, we've not been well-serving the needs of managed travel," said Byron Bishop, Expedia's senior vice president in charge of corporate travel. But with the deal, Expedia will take "our experience of selling tickets online and satisfying those customers and marry that with what Metropolitan has, which is its deep experience with corporate travel."
The deal will make Expedia one of the first online travel companies to specifically target corporate customers. The move will place it in direct competition with some of the heavyweights of the travel industry, including American Express and Rosenbluth.
While many corporations still have deals with such travel services, many of their employees are already checking fares on sites such as Expedia, notes Tom Underwood, an analyst at Legg Mason. Having employees do what the company's travel agents should be doing is highly inefficient, meaning that by moving into corporate travel services, Expedia has an opportunity to streamline the process, Underwood said.
"I think the potential is huge," he said, noting that the corporate travel market is worth about twice as much as the market for leisure travel.
Expedia expects to close its acquisition of Metropolitan Travel later this month, Bishop said. The company has already extended an offer to all of Metropolitan's approximately 150 employees for jobs at Expedia.
By the end of the year, Expedia plans to have in place technology specifically designed to assist corporate travel purchasers. Not only will they be able to buy travel online using features similar to those on Expedia's main site, but Expedia also plans to develop tools to allow them to manage their travel policies, the company said.
Metropolitan Travel directed inquiries to Expedia.