Is Expedia turning into a metasearch?
On a call with a hotelier the other day, conversation turned - as it so often does - to the topic of OTA undercutting. Bringing up the Expedia page representing his hotel, this hotelier pointed us to the rooms & rates listings.
"Any rate with a photo next to it is mine," he explained.
"Any rate without a photo - I have no clue where that came from. And those rates are the ones that are undercutting me."
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This isn't the first we've heard of Expedia potentially crossing over into occasional metasearch territory by displaying rates from multiple vendors. It looks like they might be experimenting with the so-called 'Amazon model' already employed by Ctrip in China. Under this model, Ctrip is a 'platform' that allows other retailers to sell on their site. Alongside directly-contracted hotels, the site lists rates from other OTAs, agencies, and wholesalers.
Though these rates are provided by third parties, the Ctrip customer has no visibility over who they’re booking with at the point of purchase. The actual vendor is only listed in the fine print of the booking confirmation sent after the fact - where it would read, for example, ‘booking purchased through Ctrip via Amoma.’
At Buy Tourism Online's event in Florence recently, Booking.com's Peter Verhoeven suggested that they too were looking to take a different approach in China than the pure OTA model they operate in the US and Europe. It seemed a fairly good indication that the Priceline subsidiary is considering operating more like a metasearch engine than a straightforward OTA in some markets.
All of this is potentially concerning news for hoteliers already struggling with parity pressures. If OTAs really are listing rates from companies other than the hotels they're directly contracted with, it becomes harder for hoteliers to put pressure on OTA partners to display their agreed rate.
A hotel group we work with has already been approached by Expedia to see if they'd be willing to experiment with direct links on Expedia to the hotel's website. If we're not mistaken, that's pretty much the definition of a metasearch site.
From hotels to OTAs, the entire travel industry is watching the rise of Google with a wary eye - and the search giant's rumoured move into OTA-like territory is putting pressure on the major OTAs to differentiate their offering.