Though not completely unexpected (in April, the two companies openly admitted they were working together on a distribution platform), the Expedia Partner Solution/Marriott agreement created an unprecedented event in the industry. But, if it is indisputable that having all the wholesale distribution transitioning through EPS will improve Marriott properties' accuracy and consistency across third-parties, the assumption that this deal will ultimately help Marriott regain control over their rates and inventory is, at best, debatable. EPS technology does not, in fact, prevent bedbanks (or Expedia itself, for that matter) from distributing wholesale rates. So, does the deal only means that EPS is going to play detective with bedbanks on Marriott's behalf? Or the partnership between these two travel Goliath has the potential to fix a distribution model that's inherently rotten? What's your take?

George Roukas
George Roukas
Partner at Hudson Crossing

It's hard to take this at face value if the stated purpose is to get third party distributors to follow Marriott's rate directions. The problem really hits the fan when the supplier provides rates to a wholesaler who sends them to someone further upstream (like an OTA) to sell. The intent of the hotelier is that the wholesale rate will be packaged with something else so the traveler never sees the discount, which would mess with their rate parity on other channels. Sometimes that wholesaler, under the presumption that the seller will package it, doesn't even pass on a (minimum) sell rate to the OTA—just the merchant cost. When the OTA marks it up and sells it for substantially less than the BAR, the hotel complains—but since they don't know who sold the rate to the OTA, they don't know who to fight with. 

Having Expedia insert itself into the process in the place of the chain doesn't change anything. They can still monitor sites for rogue rates, but if they don't know where the OTA is a getting the rate from, what can they do? It is technically possible to put tracers on the rates, but I don't know of anyone who's done that in practice.

It's also important to note that Expedia has been one of the biggest offenders in selling package rates directly to customers—but they do it a day after the customer buys a flight and claim it's a package with the two purchases just separated by a little time. It's good to know Expedia has such a great sense of humor!

I suspect this is about something very different. I sometimes think I can hear Marriott's Marsha creaking under the load of modernity. The distribution team must be wondering what they can possibly do for a second act. Once attribute based shopping becomes more prevalent, Marriott won't be able to compete with Marsha on the back end. 

I suspect this may be a trial balloon to see if Expedia might someday replace all of Marriott's CRS systems. Expedia is one of very few that have both the technology and the corporate imperative to make it happen.

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