Exclusive: Expedia Argues That Hotel Owners Are Losers in Direct-Booking Push
Skift Take
We'd rather see PricewaterhouseCoopers or another neutral party estimate the revenue impact of hotel chains' direct-marketing campaigns instead of relying on Expedia, which obviously has vested interests. Still, Expedia's chart furthers discussion and the dialogue under way with hotels, and speaks to how seriously Expedia views the threat and the issue.
Expedia is trying to enlist a new ally — hotel property owners — in its fight against the moves by hotel chains such as Hilton Worldwide, Marriott International, and Hyatt to increase direct bookings by offering lower rates on their websites than they give to the online travel agencies.
In a chart provided to Skift, Expedia lays out what it calls a conservative estimate on how hotel owners would be taking a revenue hit of around eight percent because of chains' decisions to publicly offer hotel loyalty program members lower rates on hotel websites than they give to Expedia, for example.
Source: Expedia Inc.
In essence, Expedia argues that despite property owners saving money on distribution costs from direct bookings, the lower rates they are offering on brand.com sites, their reduced exposure on Expedia sites, a diminished billboard effect and higher loyalty program costs lead to reduced revenue per available room for owners of about 8 percent.
There will undoubtedly be plenty in Expedia's numbers for hotel chains, owners, and others to pick apart, including the issue of whether the lost traffic from the billboard effect is overstated
