A transition appears to be underway as Expedia increases the number of technology solutions it offers and builds partnerships out across the industry but will this strategy succeed asks EyeforTravel’s new report into the online giant?
A subtle change appears to have happened in the online travel environment. Emboldened by changes to regulatory frameworks, new technologies and growing revenues, travel suppliers are fighting to claw back market share. In response, Expedia appears to be pushing a new strategy to ensure future growth by growing its partnerships and services to support the industry according to a new report into the company.
Expedia sees opportunities in facilitating services in the travel industry and mobilizing its technical expertise to enhance its position at the center of travel distribution through partnerships and offering a full spectrum of travel products that are personalized for consumers, whether they are buying a hotel room, rail ticket or a whole package.
Most notably this can be seen in the roll out of new products and options for partners across 2016 and 2017. They have worked to give access to inventory and have invested in white-label technology, including for hotel loyalty, and also on advertising products. These have included:
· Private Label Packages: Expedia worked with Marriott to create Marriott Vacations where the hotel chain uses a dynamic packaging platform powered by Expedia so their customers can book flights with accommodation, and earn Marriott Rewards when they book. Expedia has since built this out into a white-label option and has signed on Barceló and Omni Hotels & Resorts to the dynamic packaging system.
· Partner Loyalty Enrollment: Red Lion Hotels initially kicked off this development as the first to have its own loyalty scheme actively promoted by Expedia in search results. Expedia claimed that there were three hotel chains signed up in August 2017 to the product, which allows users to enlist bookers directly to their loyalty programs from Expedia sites and in December 2017 announced that G6 Hospitality had signed up to the scheme.
· MICE Booking Technology: Expedia began testing their new MICE platform in mid-2017 and are hoping for a major roll-out in the near future. The system is a front-end booking tool and a back-end management and analytics platform.
· Rev+: This is a B2B service for revenue managers of hotels, free to those already part of its distribution network, that runs of Expedia data and appears to be an attempt to provide a rival to BookingSuite.
· TravelAds Direct: Seemingly a reaction to book direct efforts, especially as Expedia’s official release stated that it offers “easier price comparison for consumers, and more potential brand touch points, bookings, and loyalty for hotels,” TravelAds Direct is CPC advertising that refers to hotel brand sites.
· Accelerator: Finalized in Q4 2015, this product allows hotels to bid against each other, transforming the search results into a marketplace where hotels pay commissions for the top listings, increasing their chance to be booked by a traveler. This could be part of their strategy to compensate for lowering ADRs, as well as gain a share of online advertising revenues and sweat the assets of their platforms.
The number of products and interest in pushing these out to major partners suggests a larger strategic focus on the area and a divergence from the approach of its biggest competitor, Priceline. Expedia has long thought of itself as a full-service travel agency, providing products that cover the entire travel spectrum. However, this advantage has narrowed as a growing universe of Application Programming Interfaces (APIs) and cloud platforms allows smaller players to access far more inventory than they previously would be able to. Whereas setting up agreements to sell car rentals, flights, or tour activities would have been technically and legally arduous to set up for a smaller travel company, they can now work through third parties and a single agreement can open up a global supply network.
“Embedding in a network of partnerships across the industry and supplying partners will help to insulate Expedia from disruption across the market and supplement their traditional OTA business,” says Alex Hadwick, Head of Research at EyeforTravel. “How successful they will be in this endeavour remains to be seen, as suppliers may prefer to take the fight to OTAs and keep them at an arm’s length in the battle for customer bookings and loyalty. However, a number of big names, including Marriott, Thomas Cook and Norwegian have signed on to various partnerships in the last 12 months, which will offer encouragement.”