Expedia CEO Says TripAdvisor’s Booking Deal With Priceline Group Is Exclusive

Expedia Inc. is shut out of TripAdvisor Instant Booking because TripAdvisor’s landmark agreement with the Priceline Group is an exclusive one regarding online travel agencies, Skift has learned.

In an interview with Skift today at the Phocuswright Conference in Fort Lauderdale, Florida, Expedia Inc. CEO Dara Khosrowshahi said the branding that partners get as part of the booking flow in TripAdvisor Instant Booking “is more partner-friendly [than when it was when introduced] and we will look at the channel when it becomes available to us. At this point there is an exclusivity period for Booking.com from what we understand.”

“And we will look at it just as we look at any other channel for how many new customers is it going to get us, how much is it going to cost us and what’s our ability to retain those new customers and to become loyal customers for our brands,” Khosrowshahi said.

The fact that Expedia has been shut out — at least temporarily — from TripAdvisor Instant Booking is ironic given the history between the two companies. Expedia Inc. spun out TripAdvisor as an independent public company in 2013.

The Priceline Group and Expedia Inc. are TripAdvisor’s largest advertisers. In a session at the Phocswright conference, Priceline Group CEO Darren Huston referred to his company as TripAdvisor’s largest advertiser, which would make Expedia Inc. number two.

Tripadvisor-Priceline Group Instant Booking agreements calls for Booking.com and sister companies Priceline.com and Agoda to handle bookings right on TripAdvisor sites.

In looking at the implementation of Booking.com within TripAdvisor Instant Booking in New York City, for example, Booking.com handles all of the booking options that aren’t processed by TripAdvisor hotel partners, including Marriott International, Hyatt and Accor. The Booking.com booking presence on TripAdvisor is only about 30 percent rolled out.

Asked whether the exclusivity that he referenced between TripAdvisor and the Priceline Group for TripAdvisor Instant Booking is global in nature, Khosrowshahi told Skift: “I think our understanding is as good as yours right now. They [TripAdvisor] are being fairly tight-lipped. Our anticipation is that over the next couple of months or quarters we are not going to participate.”

“Our volumes, as you know have been really strong, at record levels,” Khosrowshahi said. “What we want to have is a demand ecosystem that is healthy where you have plenty of variable channels out there and you have lots and lots of people coming direct to you and that formula has been working for us even with the launch of TripAdvisor Instant Book.”

TripAdvisor officials have consistently declined to specify details of the TripAdvisor Instant Booking agreement with the Priceline Group, a pact that increased TripAdvisor’s market share by $3 billion on the day it was announced.

Asked again today whether the TripAdvisor-Priceline Group pact is exclusive, TripAdvisor spokesperson Kevin Carter said: “We do not discuss our deal terms.”

Khosrowshahi said he doesn’t view TripAdvisor Instant Booking as a “fundamental threat. We look at is an opportunity that we look at a year or two years’ forward.”

He repeated his opinion that the branding for Expedia within TripAdvisor Instant Booking wasn’t adequate in the beginning but branding for partners has now improved.

“Well, we didn’t jump in first because the product as we saw it was not necessarily a product that we were interested in participating in,” he said. “The most significant elements being the branding components or the lack of branding components.”

But TripAdvisor has made concessions to partners.

“Companies’ positions change over time and you’ll have to ask Steve [Kaufer, TripAdvisor CEO] about why they started where they started and where they are now,” Khosrowshahi said. “But in looking at the product that they launched with Booking.com, the branding components are strong. The communication is better, and by the way, that’s a good thing for the consumer. The consumer should know if they are booking with Booking.com or Expedia or Hotels.com, whoever’s responsible for the service.”

Khosrowshahi has consistently made more positive statements about the emerging Book on Google than TripAdvisor’s booking product. Booking.com has been testing Google’s product and Expedia anticipates doing so as well.

Of Google’s new travel initiatives, Khosrowshahi said:  “As long as we can participate as an advertiser. What we care about is Google is going to build lots and lots of different products. We want to make sure we have a partnership with them so we understand where their roadmap is, and we can participate in those products. And I think they’ve been quite consistent and I think they’ve done much better in engaging with their partners about where they’re taking their products and how they can participate. I’d say so far so good.

Look Monday for more of Skift’s interview with the Expedia CEO.