September 03, 2013

More on how the Expedia/Travelocity deal could shift online sales away from hotels


While Travelocity executives insist that the company will continue as a competitive, standalone entity, Expedia, with the agreement in place, stands to gain access to almost two-thirds of a channel in which more than $40 billion in travel was booked last year.

According to this article, hoteliers must worry about that balance of power tilting back to the OTAs as a result of the Expedia-Travelocity agreement.

The big question is how the lodging industry will respond. Hoteliers have long and frequently sounded alarms about OTAs because they are hotels' most expensive sales channel.

Estimating that OTAs cost them about twice as much as any other channel in terms of the wholesale prices they get for rooms sold, hotels have been pushing hard to generate more of their online sales on their own websites.

"This will be against the best interests of the [hotel] industry, especially independent hotels who would be an easy prey to this two-prong monopoly," Max Starkov, CEO of hotel Internet marketing firm HeBS Digital warned. "Major hotel brands would be less vulnerable, especially if they continue focusing on the direct online channel and become more innovative and technologically savvy."

Get the full story at Travel Weekly

Read also "The Expedia/Travelocity deal and its implications for hotel suppliers"

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