A cyber war has erupted in recent weeks between major online travel agencies such as Expedia (EXPE) and Priceline.com (PCLN) and hotel chains over how some discounts are being offered to consumers.
Earlier this year, Marriott (MAR), Wyndham (WYN) and Hilton Worldwide (HLT) stepped up their efforts to lure consumers away from the online travel agencies, or OTAs, by directly offering discounts on room bookings. The discounts leave the OTAs out of the picture — and out any fees or commissions on the bookings.
Expedia and Priceline, the two largest OTAs, are fighting back against these direct-to-consumer offers by making the hotels harder to find on their sites, according to industry experts.
Third-party travel sites like Trip Advisor, Expedia and Orbitz are getting fewer flights because carriers are holding back their business. New Yo…
Bellevue, Washington-based Expedia strips out descriptive details of some hotels — such as pictures — and buries listings deeper in its search results, an e-commerce practice known as “dimming,” according to lodging sources. Priceline’s Booking.com site has lowered the rankings of some hotels even though it keeps the pictures online, according to OTA Insight, a travel technology company.
The stakes are high for hotel companies, which can lose bookings when the travel sites alter their search results. According to the industry data firm STR, hotel chains in the U.S. collected $142.6 billion in room revenue last year, compared with $132.8 billion in 2014.
It’s believed the OTAs collect more than $1 billion in revenue annually on the hotels’ behalf — money that doesn’t make it into hotel coffers when guests pay for their stays in advance. When a consumer pays after his or her stay is complete, the hotels return some of the money collected back to the travel agencies.
Consumers, for their part, are caught in the middle of a fight many have no idea even exists.