Expedia focusing on ‘value’ not ‘transaction’

Expedia Partner Services Group (PSG) has announced a number of new and renewed deals with hotels and airlines as it continues to build up EMEA inventory for Expedia Inc’s 70 consumer sites worldwide.

Matthew Crummack, senior VP, global lodging within PSG, explained that the unit, which was set up three years ago, kickstarted a shift in Expedia Inc’s approach to its relationships with partners.

“We have developed a group of people who are working towards ‘value’ for our partners rather than the focus on ‘transactions’ we’d had in previous times.”

The unit employs 1,000 people worldwide, 300 of whom concentrate on supplier relations in EMEA. It also has 14 offices in the area.

Crummack said that Expedia was building relationships with hotel schools in the US, France and Italy to develop “young, motivated” market managers.

“We need individuals who understand revenue management as well as hotel operations,” he said. Expedia Inc’s 70 sites and 60 million unique users a month give it access to “a richness of supply and demand data” which enhances the consultancy and advice its team can offer to individual and chain properties.

The deals announced this week include an enhanced arrangement with Carlson Hotels Worldwide, expanding a previous deal limited to North America into a worldwide arrangement. Carlson’s brands include Radisson, Park Plaza and Park Inn.

“This is a renewal, but it signals an improvement in the way we do business together,” he said.

Elsewhere, Expedia has also announced that it has started to sell InterContinental Hotels inventory following the “historic agreement” signed late last year. Some 4,000 IHG properties are now bookable through Expedia for the first time.

This deal allows Expedia to generate revenue other than just transaction income from IHG. It became known as the “media model” and signalled a shift in how OTAs not only work with suppliers but also generate income through traffic to their site.

Crummack declined to specify whether the improved deal announced with Carlson included any element of this. “We don’t comment on specifics,” he said. “We tailor our deals to the needs of the partner. IHG had unique needs, which are different from what Carlson wanted.”

PSG has also signed Jumeirah Hotels and Resorts, with the Dubai-based luxury hotel chain distributing through Expedia for the first time. It has also been busy in southern Europe, signing a number of Spain/Portugal specialists including Ayre, Egido and Sercotel.

Overall, it has lifted supply in Spain/Portugal by 36% since the start of the year. There are also 44% more properties in eastern Europe, and 40% more in Italy.

Away from hotels, Crummack was keen to talk up an enhancement of its relationship with SAS. “It’s the first time that SAS has signed a global deal with an OTA,” he claimed.

Crummack added that having one team in charge of all supplier contracts for Expedia Inc’s global point of sale was helping it get rid of its reputation of “being difficult to do business with.” He said: “We are seeing positive feedback from our partners who are taking advantage of having one point of contact for all Expedia sites,” he said.

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