What Hyatt’s Expedia clash could mean for the industry

From Travel Pulse

The Hyatt Hotels Corporation has informed Hyatt hotel owners that it intends to terminate its Corporate Lodging Agreement with Expedia this summer if the two sides can’t agree on new terms—mainly, securing lower commissions.

In a letter to owners obtained by Hotels, the Chicago-based hotel company confirmed it plans to pull out of Expedia and its subsidiaries like Hotels.com, Travelocity, Orbitz and Hotwire if the agreement isn’t reached by July 31.

Hyatt’s chess move comes on the heels of months of failed negotiations.

Despite online travel agencies (OTAs) having gained considerable market share in recent years, Hyatt expressed confidence in being able to drive more direct traffic by incentivizing lower-cost booking alternatives, including travel agencies.

Hyatt would target increased investment in digital marketing to encourage travelers to book through agents and travel management companies.

Hyatt’s bold strategy comes at a time when more and more hotel brands are pushing direct-booking campaigns that reward guests for booking directly through a company’s website, mobile app, call center or a travel agent. In April 2016, Hyatt joined the movement, announcing that loyalty members would earn up to a 10 percent discount on their hotel stay when booking directly through one of the aforementioned channels rather than an OTA.

“Hyatt.com guarantees the best price, and its hassle-free experience means you manage your reservations on your terms,” Hyatt’s senior vice president of global digital Ellen Lee said in a statement at the time.

Hyatt just recently rolled out its revamped loyalty program World of Hyatt featuring additional tiers and more ways for members to earn status.

While it appears Hyatt has been building toward this moment and has a solid plan in the event of a future without Expedia, it will still have to battle a popular misconception shared among many travelers.

“Over quite the long period of time, the misconception has just generally built up that you will get a cheaper price for the same hotel room on some online travel sites,” Hilton’s Vice President Of Global Marketing Andrew Flack told TravelPulse last year.

Nonetheless, if Hyatt turns away Expedia it could spur a jump in business for alternative booking channels like travel agents.

 

 

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