• Expedia builds its own brand stable

Expedia has launched a further challenge to the hotel sector by trialling a new product which gives customers access to offers at hotels, but only those properties which have achieved the highest ratings on its TripAdvisor sister site.

SniqueAway is being trialled at the same time that Expedia's opaque brand, Hotwire, is being rolled out internationally, using unpublished low rates for mystery hotels  – the antithesis of TripAdvisor's reviews-based approach. The group is completing its effort to cover all bases with the launch of a loyalty programme next year.

SniqueAway, which the group describes as the first private-sale-meets-crowd-sourcing site, has been launched in the US alongside the Trip Advisor product offering limited-time, members-only offers on hotels – all of which must have earned a minimum four-star rating classification and a minimum four out of five TripAdvisor review rating.

As with sites such as Facebook, membership can only be obtained through invitation by another member, further increasing credibility, although the TripAdvisor reviews which drive the site remain the thoughts of the wider populace.

Dara Khosrowshahi, Expedia's CEO and president, said that the product was the "third leg" in the evolution of online sales. Speaking at the company's third-quarter earnings call, he said: "Originally, when we came onto the scene, we were offering merchant rates below rack rates. Then the internet became the rack rate, so opaque models got introduced. Priceline, the Hotwires of the world, the dynamic package business, which allow you to save money. Those were a second leg of growth for the business.

"I think that these flash sales could be a third leg. The early results are very good, but this is a long journey. It's a very new concept, and we're not ready to declare whether it's long-term, how large it's going to be or exactly what the opportunity is going to be."

At the opposite end of the spectrum – cheap rates but no idea which hotel you are staying at, or ‘opaque' booking – the group is partnering with Hotwire. The group, which owns Hotwire, launched over the summer in the US and started to roll it out internationally last week, with plans to experiment with opaque products in international markets "more broadly in the future, both on the Expedia point-of-sale as well as directly with the Hotwire brand".

Expedia is also planning to launch its own loyalty programme, which will roll out in the US in January and is rolling out its Hotels.com loyalty programme WelcomeRewards internationally.

Khosrowshahi said: "These are robust programmes which we think will differentiate our product offering over the long term. At the same time, our pace of testing, learning and optimising our product set to consumers has and will continue to accelerate, from improved mapping to automated sort order, improved site speed, mobile sites and applications and many, many more."

 

HA Perspective: Hotel operators are currently suffering from mixed emotions in the face of Expedia and its extensive stable of brands. Expedia is seeking to stay one step ahead and offer something for all its customers, from those who only trust the opinions of people they know, to those who are only looking for a bargain.

Perhaps the most worrying thing for established hotel brands is that Expedia continues to find new ways to disrupt the existing market. Hoteliers like to call Expedia a partner, at least in public, but it is a partner you don't want to turn your back on.

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