It looks like Expedia could be formalizing their practice of displaying third-party rates alongside directly-contracted rates from hotels. When we first covered this back in December 2017, it seemed as though Expedia may have been exploring a metasearch-type model, with one hotel group telling us they’d been approached by the OTA about testing direct links to the hotel website. Unfortunately the situation no longer looks as positive as first thought.
We’ve heard that Expedia may be introducing ‘multi-source channel rates’ into their contracts with hotels, which would mean they have license to display rates other than those from the hotel. This spells bad news for hoteliers struggling with rate parity, and especially for those being undercut by unpackaged wholesale rates. We’ve heard the impact first-hand from a hotelier being undercut on his own Expedia listing: “Any rate with a photo next to it is mine,” he explained to us. “Any rate without a photo – I have no clue where that came from. And those rates are the ones that are undercutting me.”
While it is unknown whether those cheaper rates, or indeed any on Expedia, are unpackaged wholesale rates, it is a distinct possibility that such rates could appear on Expedia in future – if OTAs are indeed sourcing rates from multiple parties.
We spoke to Greg Duff, Firm Chair and Principal at Garvey Schubert Barer Law in Seattle, about the scale of the wider ‘wholesaler problem’ – and whether there’s anything hoteliers can do to combat it before their out-of-parity rates appear on OTAs.
The ‘wholesaler problem’
“This is a phenomenon that we have been hearing about from our clients for about two years now,” Greg tells us. “What we’re finding is that many traditional wholesalers, particularly those that have an allotment or some kind of production obligation with regard to rooms, if they cannot push the rooms on a package basis then they are taking the rooms and redistributing them on a standalone basis but using the discounted package rate.”
