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Priceline Group CEO Darren Huston apparently isn’t the only travel industry bigwig unenthusiastic about big moves by Marriott and Hilton to push direct bookings by withholding their lowest rates from the major online travel agencies.
Dara Khosrowshahi, the Expedia Inc. CEO, isn’t a big fan either.
At an investor day in New York City March 16, Khosrowshahi said Marriott and Hilton have a choice to make and they will likely lose share in the Expedia marketplace if they don’t provide their best prices and availability.
Hotels fall to lower positions in Expedia’s sort order and their conversions decline when properties or brands don’t aggressively engage on Expedia sites, Khosrowshahi said, adding that there are plenty of rival brands ready to gain share.
He said Expedia “absolutely” wants the most attractive hotel rates on its sites.
On the other hand, it likely wouldn’t be a shock to Hilton and Marriott that enticing consumers to book on their own websites would have an adverse impact on their performance on Expedia sites.
Asked about Khosrowshahi’s comments, a spokesperson for Marriott International said: “We have great relationships with our OTA partners and will continue to work with intermediaries in mutually beneficial relationships that enable us to achieve our strategic objectives. We realize that customers today have a choice of booking channel at their fingertips so our goal is to offer a portfolio of direct and indirect booking channels for our guests.”
Hilton declined to comment on the issue.
In other news from the Expedia meeting:
- Expedia is supplementing flight searches on Expedia.com for round-trip tickets with options to split tickets, or purchase two one-way tickets from different airlines, and is also adding airline reviews. In addition, although it wasn’t discussed at investor day, Expedia is experimenting with opaque Expedia Bargain Fares, where the traveler learns the identity of the airline only after booking.
- Khosrowshahi said Expedia is “agnostic” over the long term about how to get the most shareholder value from its Trivago unit, and moves might include holding onto it while increasing transparency about its performance, as well as spinning Trivago off or having it do an initial public offering (IPO).
- Expedia’s Egencia is already the 5th largest corporate travel agency in the world and its gross bookings are growing 20 percent year over year. “We think over the long term this can be a very big business on its own,” Expedia CFO Mark Okerstrom said. “We want this business to be significantly larger than it is today and that is absolutely the plan.”
- Expedia’s Accelerator program, where hotels pay an additional percentage of their base commission to move higher on Expedia’s pages is just the beginning of moves to make Expedia more like a marketplace and there are several experiments of additional products under way.
- On competition with Airbnb, Khosrowshahi said he likes it when there is such a vertical competitor in large sectors like alternative accommodations. He said he likes Expedia’s position. “We are quite confident we can win our fair share and more.”
- HomeAway is making still-undisclosed changes to its subscription model for vacation rentals and Expedia/HomeAway will take into account positive and negative feedback it is receiving about the move.