From 'complete failure' to boss of Expedia: Mark Okerstrom on being a travel tycoon
When he took the helm at Expedia last year, Mark Okerstrom had, by his own admission "big shoes" to fill.
Under his leadership, the company doubled its annual revenue from 2012 to nearly $8.8 billion in 2016.
The pair are still firm friends, and Khosrowshahi remains on the Expedia board.
“I’m so happy Dara has left,” the Canadian-born executive smiles. “Now I get to have this job.”
It’s no small responsibility.
Seattle-based Expedia, which was spun out of Microsoft in 1999, now has 375 million visitors every month and is worth $18bn.
Customers spent $24.7bn (£19.6bn) on bookings in the most recent quarter.
As well as Expedia itself the company owns a host of consumer names like Trivago and Hotels.com.
But Mr Okerstrom didn’t always want to be a high-flying travel executive.
The 45-year-old has had a chequered career which he describes humbly as a “complete failure”.
He initially dreamt of becoming a policeman, but found himself in London working for an investment bank, followed by a law firm.
He came to Expedia in 2006 and in 2011 was appointed Chief Financial Officer, serving as Khosrowshahi’s right-hand man.
It is refreshing to hear where he gets his management style from.
“When I first took the role, I started listening to podcasts with stupid names like ‘how to be a good CEO and four things that great CEOs do.’”
The web tutorials seem to have paid off.
But Mr Okerstrom is acutely aware that he is at the helm of an internet company during one of the most tumultuous periods in the industry’s history, save the dot com boom.
“We have 2bn changes to inventory in our lodging system every day. You cannot hire enough people to police that kind of activity,” he says.
“The only thing you can do is watch what is happening, and use artificial intelligence.”
Shortly after stepping up to the role from chief financial officer under Khosroshahi, Okerstrom rebranded, including a logo change and ramping up marketing spend. He has also turned the company into one he claims is now “customer-centric”.
As part of that goal, Expedia is trying to crack down on “dynamic pricing”.
During natural disasters, such as when prices skyrocketed during Florida’s floods in October, it has tasked staff with manually policing when such events might cause temporary accommodation prices to skyrocket.
“We have to come up with feedback mechanism so we can know what those partners say is true and probably not something we can do with humans alone,” he says.
It’s a challenge to police a site that might have 95,000 rooms or properties available one day and five million the next. But as well as cracking down on exploitative hotels, Expedia is trying to correct a peculiarly modern holiday phenomenon: the holiday filter bubble.
When travel aggregators exploded onto to the scene they were praised for cutting out the middleman travel agent and handing the masses an accessible and cheaper alternative to book flights and accommodation.
But websites that act as a portal to millions of people’s holidays have also been accused of creating a feedback loop, leading to a surge in tourism to areas that are now struggling to sustain the footfall.
“Over-tourism in Venice, Barcelona and Machu Picchu is an issue,” Okerstrom says. He believes the technology Expedia owns can manipulate tourism in the future. It is already working with government backed Visit Britain to do just that.
“We have such a massive audience, we can drive travel patterns,” he says.
“I think we can absolutely influence [travel]. We don't want Venice or Angkor Wat to be closed down, we want them to be around forever for sustainable travelling and we can steer traffic direct people to other places that are totally amazing,” he says, wide-eyed.
Expedia has invested heavily in technology and Okerstrom says it will continue to pour money into advanced technologies it is already working on like voice bookings, eyeball tracking and facial recognition sensors that can detect whether people feel happy or sad when they see an advert.
It currently offers hotels and rental companies analytics tools that show how and what people are booking and and even can even suggest that a hotel releases a room with almost 100pc accuracy that it will be sold that day.
But it might want to dedicate time to cooling down its pushy customer-facing technology like the “one room left” prompt, as British regulators circle.
In June the Competition and Markets Authority said it would be taking companies to court if they did not end misleading practices like pressure selling.
It’s something that doesn’t seem to worry Mr Okerstrom whose varied CV has afforded him the perspective some self-assured billionaire founders lack.
He has never been a founder and his vast experience across industries, including a stint in London in wealth management and law, has taught him growth is important but not at all costs.
“I believe that big tech needs big leaders,” he says. “But big leaders can also be on the board or they can be on the senior executive team.
"I heard one of my colleagues say ‘when you move up, shut up’ and that means you need to listen and synthesise information, or bring in experts. "That’s just good governance. I don’t think it comes down to one individual.”
