Tour operators

Big Interview: Expedia affiliate Network seeks mutual benefits of coopetition

Posted by admin on
Big Interview: Expedia affiliate Network seeks mutual benefits of coopetition

The neologism coopetition has its origins in the technology sector according to online encyclopedia Wikipedia, but it could well have been a concept coined especially for travel.

Wherever you look these days travel firms are both competing and cooperating on many different levels leading to what may appear at face value to some surprising corporate tie-ups.

Only last week Thomas Cook, the high street agency that for many UK holidaymakers still epitomises the traditional analogue package holiday, announced a hotels supply deal with rival OTA Expedia.

While this agreement for city break and domestic inventory may have raised a few eyebrows, it is very much a sign of the times.

Expedia has been an established part of the B2B hotel inventory distribution scene for years through its Expedia Affiliate Network.

For London-based Ariane Gorin, the general manager who has overseen the division affectionately known as EAN (pronounced Ian), for the last three-and-a-half years competition with online giants like Expedia is not a zero sum game.

“I’m a firm believer that the role of the travel agent will continue to be key,” she said, “people want advice.

“Our own Expedia brands are exploring ways to allow people to do their own travel arranging online, but people are always going to want to walk into a travel agent and say ‘help me figure out what my plans are going to be’.

“What Expedia Affiliate Network (EAN) tries to do is say to our partners you worry about what your value proposition is to your end customer.

“If it’s higher level of service, do not worry about whether you have the right inventory or rates, we can take care of that for you while you focus on what differentiates you.”

Although the traditional tour operating model for hotel distribution in which large upfront deposits are exchanged for static wholesale net rates and volume guarantees, hotels are increasingly looking to exploit more sophisticated routes to market.

This is being facilitated by the rise of channel managers on the one hand and the business insight and price transparency driven by global marketplaces like Expedia, rival OTAs and affiliated metasearch sites like Trivago and Google.

Gorin said the costs in terms of time and money for hotels that do not want to commit a large chunk of their inventory, or even go exclusive, with one distribution partner are coming down, so more, not less dynamic yield management is likely in the future.

“Hotels need to look at things from an overall profitability perspective, not just focus on margin,” she said.

“With all of the tools that are giving hotels greater visibility in to yield management and dynamic pricing you are seeing hotels getting more sophisticated about who they are providing inventory to.

“It probably only makes sense to have direct contracts with hotels where you have a reasonable amount of their occupancy so if they’re going to give anyone a special rate it’s you.

“We have a lot of partners who will do their own contracting in their home markets where they are strong and use us for everything else outside of that.

“We have lots of partners with global marketing teams but they do not have the scale to cover everywhere.”

Gorin said one of the advantages of using EAN over other B2B suppliers like traditional wholesalers and bed banks is that partners benefit from the test and learn culture that is at the heart of the Expedia approach.

This means the results of its investment in property mapping and all the optimisation work done on its B2C brands like Expedia and Hotels.com and Egencia in the business travel sector are available to EAN partners.

“Because we are part of a larger company which is Expedia Inc you get access to an amazing inventory of pictures and descriptions which we are sharing across all of our brands as well as with our partners,” Gorin said.

“With many wholesalers they are getting inventory from hotels and providing that to their partners, but are they optimising the images, are they taking the signals that come from Expedia’s customers to improve their offering?”

Expedia’s big vision is to become an ever more integral part of the global travel market, even to become the global marketplace for travel, by using its scale and focus on technology to embed itself at the core of the industry.

As an intermediary that owns none of the product it sells it must demonstrate its worth to the supply side and it is doing this by providing its hotel partners with free technology they can use to glean market intelligence and run their back office operations and marketing.

In December thousands of these partners will converge once again on Las Vegas for Expedia’s annual huge partners’ conference to hear about the firm’s latest developments, underlining the important position it has established for these businesses.

A crucial aspect of this is a widening of distribution options for hotels rather than attempts to syphon it all through Expedia’s own in-house B2C brands, hence the rise of coopetition.

As well as helping hotel, agent and airline partners expand their revenue stream and break into emerging markets, EAN sees future growth in driving up ‘earn and burn’ rates in loyalty schemes where customers are using points to purchase hotel stays.

Today, EAN offers a “suite of products and services that are configurable and delivery inventory in the way that easiest for its partners”, said Gorin including an API connection, a branded Hotels.com widget or white label option and most recently the Affiliate Voyager tool.

This agent booking and customer service portal is Expedia’s own technology which it uses in its contact centres configured for third parties.

Gorin said it is aimed at any partners with large agent divisions whether on the high street or in call centres looking to better support and service their EAN bookings and sales.

“We try to make things as easy as possible for our customers,” said Gorin who indicated EAN was open to discussions on commercial terms based on what potential partners’ needs are.

“We have a commercial model that we use but what I have tried to do as leader of EAN is make sure we are constantly evolving that based on opportunities with our partners. We are successful if our partners are successful.”

Comments

This is a community-moderated forum.
All post are the individual views of the respective commenter and are not the expressed views of Travolution.
By posting your comments you agree to accept our Terms & Conditions.