As the Expedia-Choice Hotels contract battle enters the next phase, their strategies are emerging as Expedia sought to woo franchisees and Choice accused Expedia of evolving from supplier to revenue manager.
In a sort of disintermediation move, Expedia Inc. went directly to Choice franchisees, attempting to woo them in a communique, obtained by Tnooz. It states: "Choice inaccurately lays the blame for failure to reach acceptable terms for working together squarely on Expedia's shoulders."
Expedia adds: "While we no longer are offering Choice hotels on our websites, we are hopeful that we will be able to work with you and Choice in a mutually advantageous manner in the future."
The full text of the letter is reproduced at the bottom of this post.
In it, Expedia claims that it already has in place with its "other strategic, long-term lodging partners," terms similar to what it was trying to negotiate with Choice Hotels.
While Expedia won't get into the fine points of the negotiations, Choice issued a statement elucidating what it sees as the core issue: "Expedia looked to dramatically alter their agreement with Choice Hotels, asking for full control of our franchisee's room inventory and pricing, including last room availability. This would, in effect, no longer make Expedia a supplier but rather a revenue manager, which would not be in the best interest of our franchisees."
If Expedia has been able to lay down these sorts of terms with other hotel partners, then the OTA has been able to roll back the Expedia-hotel industry dynamic five or six years and been able to materially take advantage of hotel industry weakness during the economic downturn.
Meanwhile, Choice detailed the measures it plans to take, including a multipronged marketing campaign, to drive traffic back to its own websites, and blunt the loss of distribution through Expedia.
Choice states: "While negotiations are halted, Choice is using both new and existing resources to drive additional business to the doors of our hotels, including but not limited to additional advertising, expanded affiliate marketing programs, e-mail campaigns to Choice Privileges rewards members, an increase in paid search optimization, the early launch of an advance-purchased rate program, and much more."
Whatever Choice does in this regard, it is hard to believe that it would make up for the business it would lose from the Expedia cold shoulder.
After all, if it were so easy to replace Expedia's marketing clout and drive direct traffic to Choice's own channels, then why would Choice have waited until now to go full-throttle in its marketing efforts?
In another tactic, Choice may be trying to become better friends with some of its partners.
Travelocity states: “Travelocity and Choice Hotels have a strong partnership. Since Choice’s recent announcement, both companies are working together to implement a plan that will make more Choice products available to Travelocity’s customers.”
The full text of Expedia Inc.'s statement to Choice franchisees follows: