Marriott
International has signed a deal with Expedia Group that gives the online travel
agency exclusive distribution rights for the hotel chain’s wholesale and
promotional room rates, availability and content to third-party travel
providers such as bedbanks.
The deal,
part of a broader agreement signed between the two brands in April, goes into
effect October 15.
Distribution
will be handled by Expedia Partner Solutions, creating what the brands say will
be a “single gateway solution” that creates a better experience for travelers
with a more accurate display of hotel descriptions, rates and fees.
“At
Marriott, our highest priorities include enhancing service and transparency for
consumers while driving profitability for owners and franchisees,” says Brian
King, global officer of digital, distribution, revenue strategy and global sales
for Marriott International.
“With
this truly innovative solution from Expedia Group, we can increase our reach to
leisure travel providers while solving distribution challenges and improving
profitability for our hotels around the world.”
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Tour
operators who currently access wholesale rates directly from Marriott can
continue to do so, along with connecting through Expedia. Other redistributors
will no longer receive rates and inventory directly from Marriott and will have
to contract with Expedia Partner Solutions to access that content.
Gino Engels, co-founder and chief commercial officer at
OTA Insight, says this is a “big, strategic move by Marriott” that shows it is
willing to tackle the issue of wholesalers undercutting rate parity.
OTA Insight’s Annual
Hotel Parity Review 2019 found parity loss on non-contracted channels
ranging from 24% for major chains in North America and 36% for major chains in
Europe, with rates of 41 to 47% for independent and local chains in those
regions, respectively.
“Over the past 12 months we’ve seen an increased focus and
investment by hotel chains in monitoring and action-orientated tools to tackle
the problem of rate parity driven by redistribution and non-contracted OTAs,”
Engels says.
“After the whole ‘frenemy’ approach of
previous years, it is very interesting to see that hotels are now building even
closer relationships with OTAs and giving control of wholesaler inventory.
"Expedia,
with their expertise in online distribution technology, should be in a good
position to be more successful in helping to manage the complexity of the
distribution landscape.”
Phocuswright’s senior research analyst for lodging and leisure
travel, Robert Cole, says the deal makes sense for both parties.
“Expedia Partner Solutions offers a
robust platform and global footprint that is much better suited to address
localization issues around the globe when it comes to content translation,
payment processing, user interface and cultural sensitivity than Marriott,” he
says.
“With this move,
Expedia is acquiring more traffic, while simultaneously restricting both supply
and demand from its competition. An interesting aspect is how much information
sharing will be taking place between Marriott and Expedia regarding B2B
business sources and the guests they generate.
"It will be intriguing to see if Expedia
will be required to share booking source and guest information prior to guest
arrival so Marriott can appropriately recognize the guest upon arrival.”