The big reasons behind Expedia's move to Seattle waterfront May 28, 2019 at 5:17 pm

A glass-walled conference space called “The Prow” rises out of the earth like a ship near the water’s edge. It’s a flagship element in Expedia Group’s opulent new headquarters along Seattle's waterfront. The move reflects Expedia’s growing supremacy in online travel – especially for lodging – in a period of rapid consolidation in the industry.

Mark Nagle, Vice President of Global Real estate for the Expedia Group, said the move will help with recruitment and retention of tech workers in Seattle's highly competitive job market. This particular location – where planes, trains, and cruise ships glide by - also seemed like the perfect home for a travel giant, Nagle said. “It's just an overwhelming sense of transportation and movement and getting people places which is really at the core of what we do as a company,” he said.

Credit: Expedia Group





Several buildings will be the new home for around 5000 workers on the 40 acre site, between Magnolia and Downtown in the Interbay neighborhood of Seattle. The new campus also features a “biophilic” design that hopes to bring employees closer to nature. “We want to bring people outside, and even when they're inside we want them to have access to views and light because studies have shown that people come back to work more focused and more productive,” Nagle said. The other featured concept in the new campus is the travel-industry sensibility of “hospitality,” with a cafeteria, for example, which offers hotel-like design elements and services.

Credit: Expedia Group



What does all of that cost on the Seattle waterfront? Around 900 million dollars, according to Expedia's public financial statements. The company can afford it. The backstory of how the travel giant got to this prime location begins at Microsoft. Expedia was a small spin-off back in the 1990s, but over years the online travel market exploded and the company was in a good position to shape those changes and benefit.

Former CEO Dara Khosrowshahi left to run Uber in 2017, but not before helping Expedia swallow up many of its competitors, from Orbitz to Hotwire to VBRO. Expedia Group now controls around 70 percent of the online travel market for lodging by some estimates. Its other travel offerings include airline tickets, car rentals, and various activities. All of that business added up to around 11 billion dollars in revenue for Expedia last year. Most of that reportedly comes from hotels. Expedia's website properties sell rooms for big chains like Marriott but also independently-owned places like Seattle's Hotel Sorrento. Shannon Sheron, Hotel Sorrento’s managing director, is proud of what the hotel has to offer. “In a sea of sameness and this shadowy brand space, independents still have an unexpected flair," she said. But Sheron admits Hotel Sorrento pays a price for that independence in the form of higher commissions - around 19 percent for every booking that goes to Expedia Group.

And independent hotels like the Sorrento are relatively powerless to cut better deals from the online travel giants, Sheron said. On the other hand, Hotel Sorrento gets a lot in return, Sheron said, including information about demand that can help them know when to raise prices. So, who's really paying for Expedia's new Seattle campus? If you do a lot of travel shopping online, chances are, you're helping. Expedia's biggest competitor Booking Holdings owns other popular sites like Priceline and Kayak. Together the two companies now control 97 percent of the online travel market according to Chip Rogers, who heads the American Hotel & Lodging Association (AHLA). Rogers believes that consolidation has been a bad deal overall for consumers. That’s a sentiment that Expedia disputes. The company has said there are a still a lot of booking options for consumers that lead to competition on pricing, for example. Either way, if you live in or visit Seattle you'll benefit from some of Expedia Group's wealth.

The company will be paying taxes. Plus, Mark Nagle of Expedia Group said it's transforming Seattle's waterfront bike trail along the edge of its new campus. The public will also be able to access new pedestrian paths, and a newly-constructed beachfront park.

Credit: Expedia Group