Why Is Expedia Helping Its Hotel Partners Sell Ancillary Services Through Its Websites?

On October 17th, Expedia announced that its hotel partners in North and South America can utilize the Expedia Partner Central platform to offer perks to customers on Expedia’s websites such as free Wi-Fi, discounted spa services, loyalty point promotions, and free parking. The company plans on launching this feature across the globe by the end of this year. In the recent past, Expedia has strengthened its relationship and offered additional services to chains such Marriott International and Red Lion Hotels. Additionally, Expedia’s CEO has mentioned in a Skift backstage podcast that the company is increasingly focusing on providing business services to its hotel partners. The services might include access to Expedia’s extranet, providing hotel partners with guest’s feedback, and an Accelerator feature helping hotels to feature higher on the company’s website. What can be the plausible reasons for Expedia to cosy up to its hotel partners?

• This initiative might point towards the trend of OTAs providing new business services to the hotels in order to gain competitive advantage over its peers in the online travel industry.
• The step might also help the company gain a larger influence in the hotel industry and hence a larger customer base thereby providing returns on its investments. Expedia spent close to $850 million on technology last year.
• Customers mostly prefer booking from OTA websites that gives them the lowest price. However, once these ancillary services are featured, customers might favor sites offering such additional perks. Currently, though Google provides such promotional services for hotels, Expedia’s biggest rival, Priceline’s Booking.com, still doesn’t give such options.

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• Have more questions on Expedia? See the links below.
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  • Expedia Year 2015 Review
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  • Expedia Q1 2016 Earnings Results
  • How Does Expedia’s Financial State Currently Look?
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  • Who Relies More On Debt: Priceline Or Expedia?
  • What Might Be The Long-Term Impacts Of Brexit On The Online Travel Agencies?
  • Where Might Expedia Be Looking For Acquisition Opportunities Currently?
  • Expedia’s Q2 2016 Earnings Preview
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  • How Do We Expect Expedia’s Hotels Division To Trend?
  • How Is Expedia’s Top Line Trending?
  • Expedia’s Evolved Relationship With Marriott International And Its Significance

  Notes:

  1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
  2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Expedia
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