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June 12, 2014, 06:46:10 AM |
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Expedia EXPE +1.19%, the big online travel site, announced on Wednesday it will begin accepting bitcoin for hotel bookings through its website, becoming the first major travel-agency to take the digital currency. If the reception is good, the company said it expects to bring bitcoin to its other service lines as well.
“This is one of those ideas that seemed to have sprung from three different places all at once,” said Michael Gulmann, Expedia’s vice president of global product, explaining how the company arrived at the decision. The company’s engineers were starting to think about bitcoin, and the company’s product and business developers were as well, he explained. They also were hearing from customers.
The company is starting with hotels essentially as a test of the system, he explained. “We want to start at a reasonable, small place,” he said, and see if it will be feasible to expand it to other parts of the business. If the trial works well, and if customer support is there, he expects the company will start taking bitcoin for other bookings as well. “Absolutely, absolutely, absolutely,” he said.
Expedia, which is using Coinbase for bitcoin processing, won’t hold the digital currency it receives, but that’s not “a statement on bitcoin, pro or con,” Mr. Gulmann explained. Rather, Coinbase’s default setting is for a daily settlement back into U.S. dollars.
Bitcoin has grown over the past 18 months beyond the small band of enthusiasts, libertarians, and anarchists who had been using it since its inception in 2009. More than 60,000 retailers now accept it world-wide, and it is attracting more venture-capital funding, which is running at a pace 30% higher than last year. Still the price continues to wildly fluctuate, but even after falling sharply this year, it remains well above the price it fetched at the beginning of 2013.
Bitcoin has also attracted controversy, including the collapse of exchange Mt. Gox, the arrest of prominent backer Charlie Shrem and the closure of the notorious “Amazon of online drugs,” the Silk Road.
Expedia is the latest big-name retailer to embrace bitcoin. Overstock.com started accepting it in January, and the Chicago Sun-Times began accepting it in April. Dish Network announced in May that it would start accepting bitcoin. There are other travel-related services out there that take bitcoin, some smaller individual travel agencies and 9Flats, an online apartment rental site. CheapAir.com began accepting it in November. But none have the size or exposure of Expedia, which bills itself as the world’s largest full-service travel site.
Mr. Gulmann said the company isn’t expecting a groundswell of bitcoin-related business, despite the internal optimism about it. But they do see it as part of their future, primarily because they see it as another way to serve their customers. “If we’re solving a customer need then we’re going to take it,” he said.
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