Expedia’s CEO defends commission structure
Dara Khosrowshahi says OTA fee structures are justified by sales-and-marketing effects for hotels.
It’s been a dozen years since online travel agencies became a regular part of the hotel industry’s lexicon. Most of the years have been contentious as a number of OTAs have figured out a way to make a lot of money from hotel reservations while not accounting for the needs of the bricks-and-mortar aspects of the business.
Expedia, Inc., which includes the Expedia, Hotels.com, Hotwire, Egencia and Trivago brand names, is among the OTA behemoths that emerged from the 2001-2002 downturn. In the aftermath of the 9/11 terrorist attacks, hoteliers eager to fill rooms any way they could jumped on the OTA bandwagon and later convinced themselves they made a deal with the devil.
Hoteliers have long complained about exorbitant commissions charged for rooms sold through the likes of Expedia. Those same hoteliers have, for the most part, no obligation to provide rooms to these OTAs but do so because they want to increase their occupancy rates.