August 29, 2013

The Expedia/Travelocity deal and its implications for hotel suppliers


The Expedia and Travelocity partnership announced last week has many implications for the hotel industry. According to this article hotel marketers should expect more consolidation, and get ready for a world in which hoteliers can break rate parity to their closed guest lists and start working on their new promotion calendar.

According to Digital Marketing Works - an online marketing agency with diverse client base in hospitality - the Expedia / Travelocity deal is not great news for hotel suppliers. Here is why:

- Beyond 2014, negotiations may become a bit harder with Expedia.

- Our costs to direct connect, however, with OTAs may decrease giving us more funds to connect with Google HPA, TripAdvisor, Kayak, etc.

- As the battle for market share between PCLN and EXPE heats up, expect ROAS from Paid Search and Meta Search to decrease.

- Expect more consolidation. What's the future for Orbitz? They could be more valuable in someone else's hand than as a public company ($1B Mkt Cap today).

- Consider Review Aggregation on your direct website. Kayak just announced this (as we predicted in Nov) and we may see it from EXPE/TVLY deal in future.

- Get ready for a world in which hoteliers can break rate parity to our closed guest lists and start working on your new promotion calendar.

- Continue to take a holistic view to online distribution and marketing. Understand that users will visit many travel websites before making a booking. We need to be on all shelves, measure attribution and innovate on our direct web channel so guests choose to book directly with us. This innovation can only work when marketing and technology work together.

Get the full story at Digital Marketing Works

Read also "Why the Expedia-Travelocity deal could be a bad trip for consumers" at CNBC