The relationship between hotels and online travel agencies has been built as an uneasy alliance, with hoteliers regularly complaining about the cost of commissions for bookings through third parties.
But Greg Schulze, senior vice president of strategic travel partners for Expedia Group, said the two sides have a clearer path to a more holistic partnership than ever before.
"The least productive thing that we can do is fight over the last piece of the pie," he said. "We absolutely see opportunity to provide great experiences to travelers, to encourage more travel and to help our partners to reach demand that they certainly could not reach on their own to help them be successful in not just filling hotel rooms or airplane seats but to provide an integrated experience. The more we can do that, the more they're going to want to work with us."
The latest news signifying a change in the hotel-OTA dynamic is Expedia's announcement that it has entered into a "preferred partnership for optimized distribution" with IHG Hotels & Resorts, which will put Expedia in charge of making sure that IHG's brands' wholesale rates are consistent and less costly.
“We are thrilled to join Expedia Group’s Optimized Distribution Program,” George Turner, chief commercial and technology officer for IHG said in a news release announcing the partnership. “This arrangement will enable us to more seamlessly manage our wholesale distribution by providing cost savings, better control over our channel mix and enhancements to our revenue management strategy, ultimately driving additional value for our owners and hotels.”
The IHG partnership marks the second such deal Expedia has signed in recent years. In late 2019, the OTA signed a similar deal to simplify wholesale distribution for Marriott International.
Speaking with Hotel News Now, Schulze said he sees the Marriott and IHG deals as proof of the power his company can have to benefit hotel companies, rather than just being a basic booking platform.
"Over these past two years, we've continued to invest in technology and people and making sure that we have the right demand because our partners want control but they also want to make sure they get those revenue targets," he said. "We have more than 100,000 travel agents and thousands of partners around the world to meet their demand requirements."
Expedia "can help [hotel brands] clean up and make sure your rates are not abused in the market," he said.
He said there has been more open collaboration between his team and hotel brands in recent years, adding that his role is to "think broadly and holistically about partnership," and that starts with technology. That extends beyond demand generation and rate parity.
"In 2019, we booked more than $100 billion worth of travel, and when you sell that much travel, you have to process that many payments," he said. "You really learn a lot about payment processing and fraud prevention. When we then have hundreds or thousands of people working on those functions, and we're going to invest that much in fraud prevention, for example, how do we then help our partners be more successful in preventing fraud? We will be working with our partners more to help solve individual problems."
He said there are things hotels and hotel brands will always do better than the OTAs and vice versa.
"We're having conversations that we just didn't have in the past," Schuzle said. "We're having our [chief technology officers] talk with our partners' CTOs. We're talking and trying to solve problems together, and ultimately, it's about how we deliver a better experience for the traveler. It's so much more productive than the conversations of the past."
He said that end-user focus should be the guiding light for both sides.
"It's just very unproductive to spend any energy trying to fight each other, because we're ultimately both serving a traveler," he said. "Frankly, it might have been COVID that helped in this. if there's one good thing to come out of COVID, it's kind of that refocus on the travel experience. Do we still have difficult conversations? Absolutely, because we don't always see things in the exact same way, and we still have independent business objectives. But it's my team's job to make sure we're understanding what our partners are trying to do."
He said his next big goal for Expedia and its partners will be providing hotels, along with airlines and car rental companies, with better insights on who is traveling and how to reach them.
"Expedia has unbelievable data about travel, and we can help hotels understand what the flight booking patterns are looking like," he said.