There is pomp and circumstance, and plenty of bluster, but most negotiations between online travel agencies, on the one hand, and hotels and airlines, on the other, eventually end up in signed contracts. That's because the two sides usually need each other, like it or not.
As Hyatt and Expedia face a July 31 deadline to craft a new agreement on commissions and other issues involved in their apparent negotiation impasse, it is useful to point out that there is a long history of such squabbles between major online travel agencies and their hotel and airline partners leading to at least a temporary severing of the relationship.
These issues usually get resolved one way or the other after awhile, and the parties end up issuing upbeat and vaguely worded press releases on how they supposedly reached a mutually beneficial agreement without disclosing the nitty-gritty details.
There are exceptions, however, and disputes are sometimes resolved in a not-so-speedy fashion (or, occasionally, not at all).
For example: InterContinental Hotels Group dropped out of Expedia sites in 2004 over trademark, transparency, and economic issues, and didn’t return for another three years.
And Delta Air Lines exited more than two dozen websites, including TripAdvisor, CheapOair, Hipmunk, and a bevy of lesser-known sites, around three or four years ago and the airline still hasn’t returned to let the outcasts sell its flights online. Delta didn’t publicly state its reasons, but the issues likely centered around economics and use of intellectual property.
The following list is not comprehensive, but details several of the high-profile dustups between the big online travel agencies and hotels and airlines over the years.
2002: Northwest Airlines’ Flights Get Removed From Expedia and Priceline
In May 2002, flights from Northwest Airlines, which merged with Delta six years later, were removed from Priceline.com, and in October of that year they were likewise no longer available on Expedia.com.
Northwest’s dispute was related to its providing discount fares to Priceline.com, which sold them as part of its Name Your Own Price service. Two years earlier, Northwest was one of six major airlines — along with Texas Pacific Group — that founded Priceline.com rival Hotwire.
It took four years for Northwest and Priceline to come to terms as their squabble over fees and other issues was resolved in October 2006.
Northwest’s dispute with Expedia ended much more quickly.
Northwest had demanded that Expedia lower its commissions to the $6 or $7 per ticket that Orbitz charged Northwest, according to The New York Times. Northwest was one of the airline founders of Orbitz.com. Expedia and Northwest kissed and made up a month later, in November 2002, and marked their new agreement with a press release, of course.
2003: US Airways’ Flights Disappear From Expedia
US Airways removed its flights from Expedia.com in December 2003 when Expedia raised its fees, according to a Frommers.com story at the time.
The two parties settled the dispute later that month and US Airways’ flights again became available on Expedia.com. Interestingly, it was then-US Airways senior vice president Ben Baldanza, who would become CEO of Spirit Airlines in 2005, who explained at the time that Expedia prior to the dispute had been US Airways’ highest-cost distribution channel and alleged that the online travel agency was singling out the airline’s customers for added fees.
2004: InterContinental Hotels Group Leaves Expedia
In the highest-profile and most-protracted hotel chain dispute with an online travel agency, InterContinental Hotels Group exited Expedia in 2004 in a dispute about trademarks, rate parity, intellectual property, business practices and, of course, economics.
IHG objected to such things as Expedia using the chain’s trademarks as keywords in search engines and telling consumers that there were no more IHG rooms available when it was only Expedia that had run out of rooms.
IHG and Expedia ended their dispute in late 2007 when the hotel chain’s properties again became available on Expedia, Hotwire and Expedia Corporate Travel. Although the parties pitched the new pact as a win-win, IHG seemingly won concessions as it got increased visibility on Expedia’s sites, and practices such as trademark infringement ceased.
2009: Expedia stops selling Choice Hotels
In early November 2009, Choice Hotels’ inventory disappeared from Expedia sites as the two parties engaged in a dispute over commissions and issues such as last-room availability, which Expedia coveted.
Unlike IHG’s three-year tug of war with Expedia a few years earlier, the online travel agency and Choice resolved their dispute within weeks of the skirmish becoming public and they signed a new three-year agreement later in November.
2010: American removes fares from Orbitz
In another high-profile dispute, American Airlines removed its flights from Orbitz.com, sister site CheapTickets and Orbitz for Business in November 2010 in a bid, according to analysts, that involved renegotiating their agreement. The tiff revolved around the airline’s desire to establish direct connections to travel agencies in order to bypass global distribution systems. Orbitz was then controlled by Blackstone, which also owned Travelport, one of the major distribution systems.
At the time, American Airlines accounted for about 5 percent of Orbitz Worldwide’s total net revenue, and that chunk of revenue was in jeopardy during the distribution conflict.
Expedia, too, wanted to head off American Airlines’ bypassing of global distribution systems, which provided huge financial incentives to offline and online travel agencies. Expedia removed American Airlines’ flights from its sites for a time as lawsuits flew.
In mid-2011, an Illinois court decided that American Airlines had to reinstate its flights on Orbitz’s sites, and the fares and schedules returned.
2013-2014: Delta Deletes Flights From Online Travel Agencies and Metas
Delta — like American Airlines — has long been highly focused on its distribution strategy and as early as 2013 and into 2014 it began removing its flights from about 30 websites, including TripAdvisor, CheapOair, OneTravel, Hipmunk, and Momondo, as well as lesser-known sites such as CheapAir, Air Gorilla, Globester, Bookit, and others.
Delta didn’t publicly state its reasons at the time for the mass exodus, but the issues likely had to do with economics and the ways its fares and services were being displayed. On many of these sites, Delta flights are still absent, although for CheapOair a consumer can book them over the phone.
2017: Hyatt and Expedia Fight Goes Public
The timeline above is not comprehensive. There have been other instances of airlines or hotels removing their inventory on online travel agency or metasearch sites —or seeing them deleted.
Some of the disputes never become public, and most of them are of a relatively short duration as the two parties take public stances to try their squabbles in the court of public or investor opinion.
In the case of Hyatt Hotels, the company told property owners it would end its Expedia agreement at the end of July if the two parties had not reached a new agreement, and that Expedia would at that point no longer be a sanctioned distribution channel.
Neither Expedia nor Hyatt would publicly detail the sticking points, but give and take over commission rates is undoubtedly in the mix.
Don’t expect the skirmish to be protracted. Hyatt doesn’t have the clout that IHG did in 2004, and the hotel company needs Expedia for distribution a lot more than the converse.
Unless Hyatt’s peers, such as a Marriott or Hilton, in an unlikely scenario throw their weight behind Hyatt and take a similar position, you can expect one of those new-agreement press releases in the next few weeks or months, at the most.
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Photo credit: Hyatt and Expedia are in the midst of tense negotiations over their agreement, joining a litany of past disputes between online travel agencies and airlines or hotels. Pictured is the Grand Hyatt New York. Ludovic Burtron / Flickr