News from Travel Technology Update: Expedia's chief unveiled some details of its new loyalty program, first announced in February, saying it will "react in a real-time way" to who and where customers are when they log onto the Expedia site.Dara Khosrowshahi, president and chief executive officer, told attendees at the Goldman Sachs Seventh Annual Internet Conference that Expedia hopes to launch the program by the end of the year.

The program is part of an overhaul of Expedia's platform (see TTU, Vol. 5, issue 4), "which defines how we relate to the customer," he said. The overhaul includes the integration of new data aggregation and mining capabilities.

Khosrowshahi said that when Expedia compares itself to other online travel agencies and supplier sites, "the customer value proposition is not as distinct as we would like it to be." The new platform will "take us to another level," he said, and will include automation of functions such as online ticket changes.

When the new loyalty program is launched, customer recognition will begin with the displays that are seen when customers first come to the site, Khosrowshahi said.

"If you come to Expedia and you are in New York, we would be promoting a very different set of packages, say to Orlando, to you," he said. A customer in Seattle, on the other hand, might see a promotion for Hawaii or Las Vegas.

"The results should be different depending on who you are," Khosrowshahi said. "We've done very little of that, but the little that we've done suggests that it's pretty promising."

Khosrowshahi said it's also likely that customers will earn points for booking on Expedia, and that the company will reward customers for booking "more profitable lines of business."

The online customer experience of researching on the Internet has a long way to go, he said, but that represents a huge opportunity for Expedia.

Right now, "if you want to go to a luxury spa, frankly, you're better off calling a travel agent," Khosrowshahi said. "It's our territory to gain, and it's an experience that we can make radically better."

In other points, Khosrowshahi said:

1) Expedia does not see the point in buying a GDS. "When we look at our fundamental unit economics, the air business is the least attractive part of the business," Khosrowshahi said.

He said the company has examined whether owning a GDS would enable it to do anything it can't do now -- and, conversely, whether the GDS could do things that it can't do now -- and the answer has been "no," so "we are hesitant to allocate capital" in that direction.

2) A major priority for Expedia is "establishing long-term relationships with our supplier partners," such as the recent five-year "full-content" deal with Continental Airlines, to "create a stable model for us on how to partner with suppliers over the next five years."

3) Expedia expects to be in Japan by the end of the year. "The Asia-Pacific market is no longer a theory, it's a reality."

4) Expedia will explore the idea of taking inventory risk in the European sun destination market. The move would be designed to control inventory, not pricing.

Other competitors buy up inventory, so there is little available at the height of the season. Taking inventory risk to control pricing "on a scalable basis is a very complex process, leaving yourself open to be killed."