Expedia Warns Hotels Chains They Must ‘Play Well’ or Risk Losing Share

Expedia Inc. is testing new business models such as linking users from Expedia to hotel websites and helping chains sign up new members for their loyalty programs in an attempt to blunt the drive by chains such as Hilton Worldwide, Marriott International, and Hyatt to drive direct bookings to their own websites.

Those hotel chains that “play well with us” will build great partnerships, and those that don’t will risk losing share and audience on Expedia sites, said Expedia CEO Dara Khosrowshahi during the company’s first quarter earnings call April 28.

These three chains have been enticing consumers by offering lower rates to guests who sign up for their loyalty program than they give to Expedia.

New Models

On the link-offs of customers from Expedia to hotel sites, Khosrowshahi said metasearch sites such as TripAdvisor and Expedia’s own Trivago have been doing this for years.

In meeting new challenges, Khosrowshahi said Expedia wants to be flexible in working with partners and therefore is experimenting with these new business models.

“Smart players who play with us will eventually gain share over a long-term basis,” he said.

Khosrowshahi said the company is not seeing any significant negative impact from the chains’ direct-booking moves as other chains and independents pick up share on Expedia sites.

“Any player is going to make their own decision” on how to balance direct and indirect bookings for their hotels, he said.

Accelerator Accelerates

Meanwhile, Khosrowshahi said although these are “early days,” there are thousands of properties that are taking advantage of Expedia’s new Accelerator program, which enables chains to pledge extra commission to move higher in Expedia’s search results.

Expedia has now expanded the Accelerator program and has rolled it out internationally, he said.

There is “very strong engagement. So far so good,” Khosrowshahi said.

Booking.com has had a similar program for hotels for years.