A Gnome is Not a Core Competency - Intermediary Consolidation Continues
With the Expedia and Travelocity partnership, hotels need to be on all shelves, measure attribution and innovate on our direct web channel so guests choose to book directly with us. This innovation can only work when marketing and technology work together.
The Expedia and Travelocity partnership announced last week has many implications for the hotel industry. This blog will explore the many questions about this deal. Why would two arch rivals and founders of the OTA merchant and packaging models hook up? DMW has a unique perspective on this due to our diverse client base of hotel owners, brands and managers including branded, independent, economy, limited service, full service and luxury hotels.
The bottom line is that market forces brought this deal to fruition. OTA margins are under increased pressure, technology capital requirements are increasing, the meta-search channel continues to grow, a proliferation of tech startups is trying to disrupt the channel, money is cheap and equity is fully valued. The consolidation wave has already begun with PCLN buying Booking.com and Kayak and EXP buying Trivago.
The rationale for Expedia is easy to grasp: