Marriott International has partnered with Expedia, Inc to offer the “Vacations by Marriott” packaged holidays platform.
The move has raised speculation that Marriott International could be the next operator to announce plans to offer its loyalty programme rate through the online travel agent.
The agreement sees travellers accessing Marriott.com now able to book a flight with their hotel. The pair said that package bookings typically had “twice the length of stay, twice the booking window, and half the cancellation rate of a standalone hotel-only booking, making them an attractive source of incremental demand for owners”.
For loyalty programme members, the room rate discount offered through Marriott Rewards is still valid. Expedia, Inc told us that: “In terms of pricing is dynamic and changing all the time. That said, the integration of our packaging technology into Marriott’s platform means all rates displayed on Marriott.com are ‘pulled’ from Expedia.”
Arne M. Sorenson, president & CEO, Marriott International, said: “We believe there is considerable untapped opportunity between our two companies to drive value to hotel owners and travellers alike by strengthening our Vacations by Marriott’s offering. We are thrilled to launch this new product with Expedia’s technology, and to explore new areas of partnership beyond our existing distribution relationship.”
Dara Khosrowshahi, CEO, Expedia, Inc, added: “We’re going through an exciting period where we are evolving how we think about our business, and especially how we think about and work with our partners. Our investments in technology, marketing and data analysis help us to better serve partners and travellers around the world, and enable us to move our value beyond distribution, for the benefit of our partners. We’re excited about the Marriott collaboration, which is born out of our test and learn philosophy, and is testament to the strength of our partnership.”
In terms of a Marriott International offering its loyalty rates to those using the white-label product, Expedia, Inc, told us: “We’re in conversation with other partners although don’t have anything confirmed at this stage”.
James Bland, director, BDRC Continental, told us that this could be the first step towards “the total outsourcing of room booking and the separation of running and selling hotels? If not the total outsourcing of room bookings, maybe a stepping stone towards the integration of airline bookings to a hotel site.” He added that the inability to book flights and other parts of the travel offering through a hotel site, compared with the ability to book hotels through others’ sites was “a significant competitive disadvantage”.
He added: “It could also be a clever piece of relationship building on the part of Marriott International. If we’re in a period of out-and-out warfare between hotels and OTAs right now, might Marriott be looking at a possible post-apocalyptic future and consider losing the war to be the acceptable price of winning the peace?”
The news came shortly after Red Lion Hotels announced that Expedia Inc was to offer the US chain’s loyalty members’-only rates on Expedia.com and Hotels.com, in addition to providing direct member sign-up for the group’s rewards programme.
Melissa Maher, SVP, Expedia’s Global Partner Group, added: “We have spent a lot of time listening and reflecting on what our partners need so we can better align with their business objectives.
Many of our partners, like Red Lion, are looking for ways to differentiate themselves, so by providing them with new and unique offerings that improve their visibility in the Expedia marketplace, while delivering incremental business that benefits their bottom line, we’re investing in our long term partnership.”
Marriott International has looked to extend the methods by which customers can book directly with it – the company was the first large operator to sign up with TripAdvisor’s Instant Booking product. The group said at the time that “the result was mutually beneficial to both partners from a strategic and economic standpoint. Marriott’s partnership with TripAdvisor will make it easy for consumers to book with our hotels, and allows Marriott to build a direct relationship with these guests even before arrival. The agreement also maintains our ability to control where the rates and inventory for Marriott’s hotels are displayed”.
HA Perspective [by Katherine Doggrell]: For Marriott International, anything which keeps its customers close has to be worth a punt and the Expedia brand name lends the OTA promise of a bargain which can help draw in those flibbertigibbet penny-pinching leisure travellers.
At the company’s most-recent earnings call Sorenson commented that there was “lots of business out there that is more rate sensitive and can be pursued by us if we think it is in our interest to pursue it”. Marriott International has always made a point of playing down the role of the OTAs in its business – as it would – but business is business and, with the cash invested by Expedia over the years, both brands are now as strong as the other in the eyes of the consumer. If there are customers to be gained, no matter how small the margin, then why not.
The white-label offering keeps guests within Marriott International’s sphere and also allows it to expose loyal Expedia customers to its own loyalty discount. Expedia is no doubt interested in accessing Marriott International’s scheme. This is a light sniff of temptation for those who would be drawn in by the Expedia name and a good test for Marriott International.
The operator is aware that, attractive as Marriott Rewards is now – with 54 million members – once it adds in Starwood Hotels & Resorts and its 21 million, it is quite the reward for Expedia. One of Marriott International’s motivation in acquiring Starwood Hotels & Resorts was to gain scale in the battle with the OTAs. It won’t give it up easily. No great wonder that Khosrowshahi is playing up the strength of the two’s friendship.