Marriott and Expedia have been renegotiating their commission rate, and it could mean big changes for the travel industry.
Because of the strength of the hotel industry, Marriott may be trying to change their rate structure, something that could affect many other hotel brands. According to Phocuswire, revenue per available room has been increasing every year for the last nine years. Marriott is also in a particularly strong place because of their acquisition of Starwood Hotels & Resorts in 2016.
Phocuswright found that perks offered by member-only pricing discounts and direct campaigns have done little to change customer’s minds about booking with online travel agencies (OTAs). A study by the company found that in 2018, direct booking with hotels online increased 11 percent but online booking with OTAs increased 10 percent.
“Hotel bookings are still migrating from offline to online channels, so a portion of the hotel online growth was a merely a channel shift from offline hotel-direct channels to online hotel-direct channels,” saidPhocuswright analyst and hospitality specialist Robert Cole. “I don’t expect any radical changes to the core nature of the agreement, or an impasse where the two blow up the deal. Each party wants to get a deal done, and somewhere, there will be terms that neither is wholly pleased with, but can live with.”
The study also found that online bookings with OTAs will grow to 25 percent in 2022.