The hotel direct-booking campaigns over the last couple of years have succeeded in resetting the online travel agency-hotel chain balance of power.

Expedia Inc. CEO Mark Okerstrom conceded as much Thursday, although not explicitly, as he said his company has felt no financial impact from these campaigns. In the direct-booking campaigns, chains such as Hilton and Marriott have advertised on TV and online, urging travelers to book directly on their own websites, where loyalty program members can find room rates lower than they’ll find on online travel agency sites.

But what Okerstrom did say is that Expedia’s customers — half of whom aren’t searching for a specific brand because cheap room rates are more important — are booking independent hotels more frequently than they did in the past instead of booking household name hotel brands. One reason is because chain hotels often appear lower in Expedia’s search results than they did in the past.

A New Equilibrium — Or Balance of Power

Given the hotel chains’ direct-booking campaigns and changing customer behavior on Expedia sites, Okerstrom said the big hotel chains are doing well, as is Expedia.

“Maybe we’ve hit a new equilibrium,” Okerstrom said during Expedia’s fourth quarter earnings call.

Over the last two decades, there has been a conflict between the hotel industry, which chafes at what it considers to be high commission rates, and online travel agencies. Companies such as Expedia and Booking.com demand these 10 percent to 15 percent commissions from large chains because of the online travel agencies’ reach and marketing power.

But now, from Okerstrom’s standpoint, a new balance has been achieved. In other words, hotels have taken back a measure of control.

Some hotel execs, too, have come to accept a cold peace with the online travel agencies: They aren’t fans of the commission costs, and while they will continue with their direct-booking campaigns, they know they still need the online travel agencies to attract bookings from consumers who don’t give a hoot about brands.

Is It Sustainable?

But is this a sustainable turn of events for Expedia and other online travel agencies, and is the company presenting a totally accurate picture about the impact, or lack thereof, of the direct-booking campaigns?

For example, consider that on a global basis, Expedia is making a big push to onboard additional hotels in key markets that it has prioritized to give consumers the widest available lodging choices. However, on Expedia’s sites, particularly in the U.S., consumers are not getting the lowest rates from the likes of Hilton, Marriott, Choice, Hyatt and Wyndham, to name a few.

When does that lack of rate competitiveness start to have an impact? Or has it already started to be felt in actuality?

This lack of rate competitiveness is particularly acute in the United States, where about 70 percent of properties were branded ones, with many participating in direct-booking campaigns, in 2016, according to Skift Research.

Other Adverse Trends for Expedia

In the fourth quarter, Expedia saw its revenue per room night decrease 4 percent. Expedia Chief Financial Officer Alan Pickerill attributed the drop to pressure from contracts (i.e. lower commission rates handed out to chains), loyalty program expenses, weather-related refunds, and better-than expected revenue per room growth in the fourth quarter of 2016.

In addition, Expedia’s room night growth decelerated in the fourth quarter to 15 percent, from 23 percent a year earlier, despite the fact that HomeAway’s vacation rental nights jumped 30 percent in the quarter. That means that core hotel room night growth was considerably lower than the 15 percent overall growth, which included HomeAway’s 30 percent jump.

Having a higher mix of bookings for independent hotels versus chain hotels might skew well for Expedia in the short term. Skift Research estimates that independents pay Expedia   commissions of 15 percent to 30 percent as opposed to big brands, which pay 10 percent to 15 percent commissions.

But in the long term, consumers will see that Expedia and Booking.com no longer have the lowest room rates from large chains like Hilton and Marriott, and independent hotels may increasingly get wooed by the chains’ soft brand collections in a lodging market, including a rising Airbnb, where competition is getting ratcheted up.

“An increasing mix towards independent hotels should bode well for Expedia, given independents pay commission rates that range from 15 percent to 30 percent, significantly higher than the major brands,” said Skift Research’s Senior Analyst Rebecca Stone.

But Stone believes there are forces in play that don’t bode well for Expedia.

“However, we question the sustainability of this strategy long term,” Stone said. “Direct booking campaigns and an increasingly competitive distribution landscape continue to push commission rates down for everyone, and the major chains are enticing independents with soft brands and the benefits of global distribution and loyalty programs. After all, we are talking about a shrinking piece of the pie, given independent hotels make up roughly 30 percent of supply in the U.S., and some of the independents that remain will likely be innovative and financially successful enough to not even need the OTAs.”

Photo Credit: An image from Hilton's "Stop Clicking Around" campaign. Expedia CEO Mark Okerstrom said hotels and online travel agencies have reached a new equilibrium. Hilton