Expedia's move seems odd, as hotel chains ramp up their direct-booking campaigns that include best-price guarantees. Our guess is that the company tested and found that most consumers are no longer swayed by price-matching offers. Or perhaps there was pressure from ongoing probes in Europe.
For years, Expedia.com, the flagship brand of online booking conglomerate Expedia Inc., joined the industrywide practice of claiming that consumers would always get the best prices for travel on its websites and apps. But on October 18, Expedia-branded websites worldwide dropped that long-standing offer, Skift has learned.
Until then in the U.S., Expedia had offered to match the price and provide a $50 travel coupon for bookers who found a cheaper flight, vacation package, rental car, cruise, or activity on other publicly available sites within 24 hours of the reservation. Similar offers were made in other countries worldwide.
Asked to comment about the move, Expedia Inc. spokeswoman Sarah Gavin told Skift: “Our marketplace, as well as the broader landscape, has evolved so much that there are so many easier ways to save than there were when this was invented. Our customers now have their hands on the savings steering wheel themselves. They don’t need the old booster seat anymore.”
One possible explanation is that Expedia wanted to promote its loyalty program. Anyone who creates an account and signs up to become a free Expedia + member can get access to a hotel price guarantee on their first and subsequent bookings, explained Expedia spokesperson Nisreene Atassi. The best-price guarantee for other travel purchases is no longer active even for them, though.
Atassi did not say that the loyalty program was the reason for the move. She said instead by email, “In terms of the thinking behind the decision, we are confident in the strength of our marketplace and the wide array of options we offer travelers from over a million flights, hotels, packages. This allows our travelers to continue to find great deals to help them see the world and get to where they need to be.”
Overall, the company did not explain the business rationale behind the decision. Had the guarantee lost effectiveness over time? Were the types of consumers who went to the trouble to submit complaints cheapskates the company no longer wanted to spend money supporting?
Or did the company fear that regulators in other markets, such as Europe, might find the notion of a price-matching guarantee a distortion of market pricing — perhaps putting independent hotel owners at a disadvantage because they didn’t have a comparable prowess at digital marketing? French watchdogs currently are pursuing Expedia and other companies about their contract terms, though not the price-matching guarantees.
Loyalty Rate Issues?
Yet another possible issue: Did the price match lose its luster because hotels often reserve lower rates for their loyalty program members? For consumers who are members of hotel programs, it is not often obvious why the low rates they see on a hotel site aren’t ones that Expedia should match.
Adding a spin to this, since 2016 Expedia has experimented with offering hotel member-only rates on Expedia.com and Hotels.com. Once Expedia started making these rates publicly available on its own website and apps, suddenly the rates that no longer counted as being publicly available for price matching suddenly were publicly available as long as consumers were already hotel program members or Expedia users signed up to become members.
In a separate conversation recently, the company told us it continues with these loyalty-rate experiments with Red Lion Hotels but had no further information to offer. In theory, such programs could create complexity if loyalty members were playing off chains like Red Lion and Expedia.
Whatever the reason, there are some suggestions the move came suddenly. Expedia’s Japanese website still hadn’t taken down its homepage promotion logo for the offer, though the page that had details on how to claim the guarantee has been taken down. Under that generous version of the offer, consumers who booked on Expedia Japan and found a publicly available lower rate on another Japan-based website within a day of their booking with Expedia could have received a refund of twice the difference, up to 20,000 Japanese yen, or about $175.
End of an Era?
The price-matching trend started with U.S. hotel chains. After the U.S. economy tanked in 2001, hoteliers saw a surge in bookings via new-on-the-scene online travel agencies like Expedia. The sudden uptick in commissions alarmed them. So Starwood debuted best-rate guarantees that promised the cheapest rates for their guest rooms would be on their own branded websites.
The marketing device was successful. By 2004, InterContinental, Hilton, Hyatt, and Marriott copied it because the promise instilled confidence in comparison-shopping consumers — and only a sliver of them attempted to make claims.
The marketing device was so successful, in fact, that online travel agencies — starting with Orbitz — soon introduced their own version of it: a promise to match rates found elsewhere. In 2012, Orbitz juiced up the offer to include a $50 voucher for future hotel bookings, and Travelocity matched it. Each added similar offers for package vacations. Soon after, Expedia copied the move for all travel products.
Terms varied. But in general, consumers had a limited time, such as 24 hours, to comparison shop. The rate found elsewhere had to be for the identical product (both nonsmoking king beds with ocean views) for the identical travel dates. The guarantees excluded many things, such as discounts for particular membership clubs like AAA, travel sold via wholesalers and private sale websites, and the like.
When it came to hotels, Expedia had one of the most generous price-matching guarantees. It promised to refund the difference and give a consumer a $50 travel coupon for future travel if they found a cheaper rate on their hotel reservation up to two days before their check-in.
It is unclear whether Expedia sister brands will drop the guarantees, too.
As of today, Expedia Inc.-owned Travelocity, Orbitz, and Hotels.com all still had price-matching offers — though the offers are not prominent. It took some sleuthing, for instance, to find Hotels.com’s once well-advertised price guarantee.
Orbitz and Travelocity only have two words on their home pages mentioning their price guarantees, while Hotels.com states that “we provide incomparable choice with a Price Guarantee” but then offers no link to it from its homepage.
Meanwhile, arch-rival Booking.com still offers a price-matching guarantee on its hotel listings. Priceline.com also continued to prominently tout its best rate offer. No doubt the company and its Priceline Group sister brands will be watching Expedia’s move with interest.
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Photo credit: The Corp Amman Jordan hotel is available for booking on Expedia's website but forget about any price- matching guarantee from Expedia. Corp Amman Hotel