I Could Be Wrong; I Could Be Right: Of Expedia, Marriott, And SaaS
By Simone Puorto, Founder | CEO | Futurist
With over two months of back-and-forth negotiation, we all conjectured there was most to the Expedia/Marriott deal than what we were shown. Officialized in April 2019, the deal positioned Expedia more as a partner, and less as a mere distribution channel for the largest hotel group in the world. Much speculation has been made on what % of commission Marriott was able to squeeze out of the deal, with (unconfirmed) rumors talking of single-digit numbers. Amongst the other many benefits of the deal, moreover, Expedia agreed not to demand inventory-parity to the group, that, in fact, continued to offer special conditions to its Bonvoy members.
That being said, the solution has the potential to -at least- put the proverbial nail in the coffin of the current wholesalers' distribution model, and not only for Marriott. Having a single gateway means better UX for travelers, increased accuracy of hotels features, and (Dulcis In Fundo) up-to-date hotels features and descriptions, a curse for Tour Operators (and unlucky travelers) all over the world. Third-parties, bedbanks, and TOs won't be able to access Marriott's rates directly, but they will have to operate through Expedia (provided they comply with the group's distribution standards), reducing complexity and friction for Marriott, and increasing transactions transparency for the end-users.
Going over the press release, the verb "to unlock" recurs quite often, and I feel it fits perfectly with the solution: the current wholesalers' ecosystem, in fact, is far from "open," and its potential far from fully exploited. One of the most obvious benefits I foresee, is that it will be harder for dishonest resellers to leak wholesale rates on metasearch engines (interesting that this happens just a few days after AMOMA filed for bankruptcy), increasing Marriott's rate quality score and decreasing its advertising cost-per-acquisitions. Another (less obvious, yet crucial) one, will be a better control over the group's loyalty program: Bonvoy gathered a poor reputation in the industry (remember the "Have You Been Bonvoyed?" community?: https://www.bonvoyed.com/), yet many members' complaints are due to the inability to earn points when booking ineligible wholesale rates from some Mickey Mouse reseller. Well, that's over now.
OTAS ARE CHANGING SKIN, AGAIN
If anything, the deal is another step to dismantle the (dangerous) "Them vs. Us" mentality that most hotels still maintain towards online travel agencies. On the other side of the table, Expedia's move confirmed that the OTAs' model is definitively shifting towards the B2B's realm and, as I've been saying over and over again for the last five years, I won't be surprised to see Expedia and Booking shapeshift to SaaS companies in the near future. But, as the mighty John Lydon used to say, "I could be wrong, I could be right."
Expedia Group Signs Industry-First Agreement to Become Optimized Distributor of Marriott International Wholesale Rates
Simone Puorto is a former hotel General Manager, consultant, author of three best-selling books on hotel marketing, MBA lecturer, and contributor for the major blogs in the industry. He is the founder and CEO of Travel Singularity, the consulting firm whose vision is to solve the growing needs for connecting the dots between digital disruption and change with the existing technology and processes in hotels.More from Simone Puorto