Skift Take

Groupon and Expedia have downgraded their partnership. Whether it was a mutual decision as both parties claim or push came to shove, it was clear that these two big brands weren't going to smoothly co-exist forever.

Groupon believes its Getaways flash sales vacation-package product could become a multibillion dollar business, but if it evolves into such a behemoth, it will do so without Expedia sharing the limelight.

Groupon Getaways With Expedia, which debuted in the summer of 2011, has dropped the Expedia co-branding.

The partnership, which saw Expedia supplying hotel and vacation package inventory to Groupon Getaways in North America, and Groupon independently sourcing some deals on its own in the U.S. and handling it all itself abroad, apparently hasn’t ended.

“It’s not ended, it’s evolved,” Simon Goodall, Groupon’s general manager of travel, tells Skift, referring to the Expedia partnership. “Expedia remains an important supply partner for our fast-growing Getaways business. However we’re no longer co-branding.”

Still, Expedia has clearly taken a big step back in Groupon’s plans.

Goodall said the change happened earlier this month and that it was a mutual decision.

Expedia, too, talked about an evolution in its Groupon relationship.

“We are evolving our relationship with Groupon,” said Sarah Gavin, an Expedia spokesperson. “Moving forward Expedia and Hotwire will no longer be merchandizing Groupon Getaways through Expedia-branded and Hotwire sites. However, portions of Groupon’s travel program will continue to be powered by the Expedia Affiliate Network.”

Gavin said the decision to change the nature of the partnership was “super mutual.”

“The Expedia Affiliate Network relationship is still strong,” Gavin said. “On our side, Expedia has several demand-generating deals programs for our partners that are more integral to the overall Expedia distribution strategy.

“For example, Expedia’s ASAP program has expanded from offering 6,000 hotel-only deals in 2012 to become a successful daily program offering nearly 20,000 hotel and flight + hotel package deals in 2013.”

There was tension built into the relationship almost from the beginning with Groupon limiting the co-branding to North America, and hiring its own sales staff to build its own travel business.

The subject of the Expedia co-branding didn’t come up during Groupon’s fourth quarter earnings call February 20. However, Groupon CEO Eric Lefkofsky said he believes the Groupon Getaways hotel and vacation package business will eventually turn into a “multibillion dollar global business.”

It’s not there yet, but it is apparently growing. For the fourth quarter, the Getaways business saw billings rise 38% to $66 million.

For full-year 2013, Getaways billings increased 46% to $264 million.

However, CFO Jason Child said that “travel and other gross billings declined 7% year over year to $168 million, with strong growth of 38% in North America, more than offset by declines in EMEA and rest of world, where we are still rolling out North American features.”

In other news, it’s not a surprise, but Groupon plans on introducing tonight-only hotel deals in its mobile apps.

After all, Groupon acquired Spain’s tonight-only hotel-deal specialist Blink in September, so it was believed to be only a matter of time before its tonight-only deals made their way into Groupon apps.

Lefkofsky confirmed as much saying that Groupon’s curated travel inventory “will include same-night hotel deals for our mobile audience.”

Madrid-based Blink so far has focused on Europe. If Groupon wants to offer tonight-only hotel deals in its largest market, North America, then perhaps it is taking some time to finesse the technology and hotel relationships in the U.S. that would be necessary to get things going.

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Tags: expedia, flash sales, groupon, packages

Photo credit: Expedia's brand is no longer up in lights in Groupon Getaways as its co-branding with Groupon vanished earlier this month. PlaceIt by Breezi

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