Expedia is broadening a program that gives a more prominent listing position to hotel operators in exchange for paying a higher commission on bookings.
The program is an attempt by Expedia, the most popular OTA among U.S. travelers, to further capitalize on its sway in the travel industry. The hotel industry’s trade group is decrying the program for what it says is a lack of transparency to consumers.
The company, which began beta-testing the program, known as Accelerator, late last year, confirmed that it was rolling out the initiative globally.
While the program is similar in concept to the Preferred Program that Priceline Group’s Booking.com instituted a few years ago, Accelerator lets hotel companies bid to improve their listing placement.
Participating hotels pay as much as double the 15% commission rate Expedia typically charges (Booking.com’s Preferred Program charges a flat commission of an additional 3%).
Accelerator is designed to enable hotels to pay extra for what they hope will be a bump in reservations during a particular period of time. Expedia said hotel companies typically employ Accelerator during a period of about two weeks to get better placement in responses to consumer queries.
The program represents a wrinkle in what had been a meritocracy of sorts when it came to the OTAs’ hotel-listing order.
Prior to Accelerator, Expedia listed its responses to hotel queries according to a combination of factors, such as how competitive the OTAs’ listing rate was with other channels’ rates, how well the hotel was reviewed by guests, room availability and the caliber of information the hotel offered in its listing, according to Adam Anderson, Expedia’s managing director of industry relations.
“If hotels are really interested in driving visibility, they have to make sure they get their house in order first,” Anderson said. “A hotelier can’t buy their way to the top if their offer strength and quality score is not up to snuff.”
Still, the American Hotel & Lodging Association (AH&LA) is criticizing Accelerator because it increases distribution costs for hotel companies and because the group says it lacks transparency when it comes to the order of hotel listings.
“It’s driving up the cost of hotel advertising, writ large,” said Maryam Cope, the AH&LA’s vice president of government affairs. “And it’s not fair to the consumer.”