Is Expedia's recovery program a genuine help for Hoteliers?
— 10 experts shared their view
A Wolf in Sheep's Clothing or Real Help? - Expedia just launched a partner recovery program, in which to participate, hotels need to provide Expedia with a.) their lowest retail rates and b.) competitive pricing on things like holiday packages and c.) member only deals. If a property opts-in,
* Expedia will turn 25% of the commission it earned from the property in 2019 into marketing credits, which then the property can use to promote itself on Expedia: Expedia travel listings, banner advertising, etc.
* Expedia will also reduce its commission by 10% for 3 months and extend payment terms for Hotel Collect bookings by 90 days.
* Wholesale rate distribution - Hotel partners can now more effectively add wholesale rates into Expedia Partner Solutions, designed to favorably position inventory across Expedia's network of airlines, loyalty & membership organizations, financial institutions, and offline travel agencies
* Market insights - Introducing data dashboard providing trends on website traffic, stay dates, and demand source markets. This is now live and complimentary to all partners using Expedia.
* Properties can also highlight hygiene measures such as contactless check-in, cleaning measures, social distancing plans.
The question is: Is the new Expedia Partner Recovery Program a good thing for hoteliers or will further deepen the hoteliers' dependency on this OTA?
Adjunct Professor NYU Tisch Center for Hospitality and Hospitality & Online Travel Tech Consultant
In my view, this new Expedia program is designed as a very clever additional entanglement of hoteliers to Expedia. It is just an additional length of rope that ties hotels closer to Expedia and increases their dependency on this OTA.
Will hoteliers buy into Expedia's program? The fear of missing out will undoubtedly force many hoteliers to join the program. Exploiting the fear of missing out has been the modus operandi of the OTAs since the aftermath of 9/11 and exactly the same thing is happening right now with this program.
Marketing credits to the tune of 25% of the commission earned from your property in 2019? Where are these credits meant to be spent? On Expedia, of course, on Expedia Travel Ads and banner advertising, resulting in Expedia bookings for the property. Reduce the commission by 10% for 3 months? So instead of 25%, Expedia will now charge an independent hotel only 22.5%? How does this help the hotel?
If you provide Expedia with your lowest retail rates, packages, and member-only rates, more travelers will flock to book on this OTA vs the hotel's own direct channel. This means Expedia will generate more commission overall, not less commission, and will increase the property's dependence on the OTA channel.
With programs like these, the deep-pocketed OTAs will become, undoubtedly, one of the very few winners from the COVID-19 crisis.
With similar tactics, the OTAs emerged stronger after all of the previous crisis and calamities: 9/11, SARS, MERS, the recession, ZIKA, H1N1. Now there is an additional twist: Because of the shelter-at-home mandates around the world, the vast majority of the population - even reluctant and late adopters - were forced to use online services to communicate and work or study remotely, search for news or information, purchase goods, and services, order food, communicate with friends and family, watch streaming services and entertain themselves. This “online planning and purchasing education” has created millions of converts and believers in online travel planning and booking, which will benefit the OTAs immensely.