Marriott International and Expedia Inc have crafted a merchant hotel agreement both view as ground-breaking.
The three-year deal, which covers Marriott distribution to Expedia.com and Hotels.com, provides a tiered compensation structure in which the two Expedia Inc companies earn incentives when they drive business to Marriott during off-peak periods, and offers Marriott properties flexible economic terms, said Paul Brown, president of Expedia Inc. Partner Services Group.
The pact replaced a two-year contract that expired on December 31.
Marriott director of global e-commerce channels, Oral Muir, said the new deal accounts for changing economic conditions, including the shifting balance of power between hotels and agency partners.
“There are clearly going to be times when any third party needs inventory more than our hotels need that party to fill rooms, and the opposite is also true,” Muir said.
“We hope a model based on value delivery will make this less of a game of leverage since for both the hotel and the third party, the advantage shifts hands as the market ebbs and flows,” he added.
The agreement also calls for Marriott and Expedia Inc to expand their direct-connect technology relationship globally, providing wider access to properties’ inventory and rates.