Expedia penned its second loyalty-enrollment agreement with a hotel chain, but like the previous pact with Red Lion's parent, the G6 Hospitality deal isn't any kind of game-changer for Expedia as it tries to soften the effects of the the big chains' direct-booking campaigns.
Expedia Inc. has been eager to make inroads with hoteliers as the large chains pursue direct-booking campaigns, and it has signed a deal with the parent of Motel 6 to get access to their lower loyalty-member rates, and to sign up Expedia site users to the chain’s loyalty program.
The Expedia deal with G6 Hospitality, the parent of Motel 6 and Studio 6, which have 1,400 properties in the U.S. and Canada, is similar in its broad outlines to the agreement Expedia signed with Red Lion Hotels, now called RLH Corp., in August 2016. RLH gives Expedia its member-only rates, which are lower than rates for its rooms that Expedia would otherwise gets access to, and in turn Expedia signs up customers booking the chain’s properties on Expedia sites to the RLH loyalty program.
The same dynamic is in play with Expedia’s G6 Hospitality agreement, although Expedia says the technology agreement between the two parties is more far-reaching than the earlier deal.
Expedia sites will enroll users into G6 Hospitality’s My6 loyalty program, and these users will also get access to Expedia’s members-only rates. In addition, Motel 6 and Studio 6 at the corporate level will participate in Expedia Media Solutions advertising programs, and G6 Hospitality gets access to Expedia’s data insights to improve efficiencies and drive incremental bookings.
Both companies said the agreement is the initial phase in a larger strategic relationship between the two companies. Future initiatives might include G6 Hospitality using Exoedia’s revenue management tools, and “white labeling Expedia technologies for G6 Hospitality properties,” the companies said.
“This is the first step in a larger strategic relationship between Expedia and G6 Hospitality. We’ll continue to work together by leveraging Expedia’s technology and marketing strengths to optimize our iconic brand, drive results and facilitate property needs,” said Lance Miceli, chief marketing officer, G6 Hospitality, in a statement. “As Expedia continues to innovate, we look forward to being among the first to work alongside them to remain at the forefront of the competitive market.”
What does it all mean?
As big chains such as Marriott, Hilton, and others pursue their direct-booking campaigns, prodding guests to book chain-only member rates on their respective sites, Expedia has been eager to blunt their initiatives — or at least to insert itself into their loyalty dynamic if possible.
So that is what Expedia has done with the parents of Red Lion and Motel 6, respectively. Over the course of the roughly two-year-old direct-marketing campaigns, Expedia also penned an agreement to provide its flight inventory to create flight-hotel package for Marriott Vacations. The latter agreement shows that Expedia can work with the chains, but the pact doesn’t have a direct tie-in to Marriott Rewards or the chain’s direct-booking campaign.
Expedia agreements with the two relatively small chains, RLH Corp. and now the budget-hotel chain G6 Hospitality, show that the online travel agency has been only modestly successful in inserting itself into the hotel industry’s direct-booking campaigns. To date, Expedia has been unable to sign a major chain such as Hilton, Marriott, Hyatt, or Best Western to any loyalty-enrollment campaign.
These direct-booking dynamics all take place as the major chains may be adversely impacting the hotel-booking growth of Expedia and, to a lesser extent, Booking.com, which is stronger with independent hotels in Europe and less reliant on big chains, than Expedia. Expedia and the Priceline Group, though, deny that the direct-booking campaigns are impacting their results.
Still, the online travel agencies in the third quarter were in a funk, although there were multiple factors in play that led to their swoon, and it certainly wasn’t all tied to the hotels’ direct-booking campaigns.
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Photo credit: Motel 6 Phoenix - Black Canyon is pictured here. The brand's parent company agreed to have Expedia help enroll members in the chain's loyalty program. Motel 6