TRAVHOTECH reviews a year of dialogue and opinion through contributions to HospitalityNET’s World Panel topics in 2020. We’ve been pleased to able to offer our thoughts and experience on several important topics through our participation in the World Panel in 2020.
A Wolf in Sheep’s Clothing or Real Help? – Expedia just launched a partner recovery program, in which to participate, hotels need to provide Expedia with a.) their lowest retail rates and b.) competitive pricing on things like holiday packages and c.) member only deals. If a property opts-in,
* Expedia will turn 25% of the commission it earned from the property in 2019 into marketing credits, which then the property can use to promote itself on Expedia: Expedia travel listings, banner advertising, etc.
* Expedia will also reduce its commission by 10% for 3 months and extend payment terms for Hotel Collect bookings by 90 days.
* Wholesale rate distribution – Hotel partners can now more effectively add wholesale rates into Expedia Partner Solutions, designed to favorably position inventory across Expedia’s network of airlines, loyalty & membership organizations, financial institutions, and offline travel agencies
* Market insights – Introducing data dashboard providing trends on website traffic, stay dates, and demand source markets. This is now live and complimentary to all partners using Expedia.
* Properties can also highlight hygiene measures such as contactless check-in, cleaning measures, social distancing plans.
The question is: Is the new Expedia Partner Recovery Program a good thing for hoteliers or will further deepen the hoteliers’ dependency on this OTA?
Of more recent times there’s been the beginning of a right sizing in the distribution world. Google’s move to democratize the travel search experience has changed the dynamic on how people find their travel ideas and destinations. Rate Parity being formally challenged in a number of developed markets. Even regulation entering the home stay market is having an impact.
The Expedia’s of the world need to compete with Google. But Google doesn’t need to directly compete with them because they are not reliant on commission revenue as a revenue stream. Oh. And they own the world’s most popular search engine where more than 80% of travel search begins. Making information more readily and usefully available is a catalyst for a whole range of other valuable products in their business model.
Changes to advertising products on the Google platform for the industry also provide some interesting and useful options for an OTA alternative. Not to mention the option to convert search to a direct booking. Yes, there are still transaction fees but at least they are on YOUR website.
The situation has forced a serious rethink at Expedia as now they will need to find relevancy for their products and approach as they will not always be the first cab off the rank on search. Something needs to be done. Booking seemed to work out some time ago that they needed their own customer base and relationship. Now Expedia will shift in that direction too.
I still ask the same question I’ve been asking for a while now;
If bricks and mortar travel agents traditionally received a 10% commission for generated business in a far more physical world with heftier cost structures, then why has the shift to a digital world copying someone else’s content and re-presenting it not resulted in a reduction of the cost of booking or commission?
Instead, the commission has increased by up to 150% in many cases.
That doesn’t sound like technology improving the cost of doing business to me.
Expedia is an important industry channel, but it is one of several and should be utilized with balance. Not exclusivity.
Viewpoint first published on HospitalityNET Worldpanel for Digital Marketing in July 2020.