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Why Expedia’s hotel commissions are fair

December 14, 2011 | Hotel Marketing

Expedia executives said last week they’ve heard all of the criticism about how expensive a distribution channel the company is, but they contend if hoteliers look at the return on investment, they will realize the value.

Gary Fritz, co-president of Expedia Partner Services Group, contended that Expedia commissions reflect value in the company as a successful marketing channel.

“What I go back to is: If you look at us purely as a distribution channel, you’re going to lead yourself to a bunch of illogical conclusions,” he said. “If you just say, ‘The (global distribution system) agency charges X and (American Express) charges Y and you charge Z and Z is greater than Y and that’s bad.’ The reality is you have to look at what we are really doing.

“I’m taking your content and putting it into 36 languages,” he continued. “We compete in the online marketing side for the same distribution opportunities that my partners do, but the reality is, just given the structure of my business, which is a multi-hotel aggregator, I’m going to convert better and therefore my ability to have a more economical and better (return on investment) on my marketing dollar is just a fact of how my business is organized.”

Fritz said he “absolutely” thinks the commissions Expedia charges are fair.

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