After the storm… Expedia arrives

Expedia launches its own price matcher to cancel the effects of  Booking.com’s Early Payment Benefit.

When it finally seemed that we were beginning to understand and to assimilate the consequences of the devastating earthquake ‘Early Payment Benefit’, from Booking.com, and that the arduous work of reconstruction of our revenue management strategies, after months of work, began to bear fruit and show the first glimpses of recovery, everything seems to indicate that our particular distribution seismograph, Price Seeker v3, has returned to detect what clearly seems a movement of great intensity. This time the tremor comes from the hand of Expedia which, as we have seen, has launched a price matching strategy with Booking to cancel the effects of Early Payment Benefit.

As far as we know, the new functionality that we have encountered clashes frontally with the interests of its historical antagonist, and also does so by giving it its own medicine test: by means of equalization. In the same way that happened in February, we have detected it thanks to a disparity found on Booking, sneaked by Price Seeker v3 (our rate shopper). From its subsequent analysis, the discovery of another identical disparity arose, this time by Expedia. We now know that the second was a direct consequence of the first.

As for its ‘modus operandi’, it seems simple. If a hotel experiences a price drop due to the Early Payment Benefit, occasionally Expedia matches that price, ensuring at least parity, and offers the user the possibility of paying the reservation online to enjoy the price improvement. Is it a “déjà vu”? No, this is what we call ‘to put the tin lid on it’.

Also, in this case, it will be the OTA that processes the payment details (the already known ‘Expedia Collect’ where the hotel receives the net amount and ignores the PVP), and the equalization will be subject to all types of reservations, not Only to non-refundable. According to our informants, Expedia will agree to deactivate the functionality whenever payment by virtual credit card is disabled on Booking. Clearer and more direct cannot be.

For the umpteenth time, it is noted that the main actors in the distribution follow each other closely, without losing detail. Each step they take, each decision they make, was conceived with the objective of reducing the prominence and weight of their most direct rivals, although on the way they also, hurt many other secondary members of the cast.

Thus, when in February of this year we warned of an unpublished Booking.com movement against direct sales, they always claimed in their defense that said functionality was not intended to harm the hotelier, but quite the opposite. They justified their implementation by appealing to the responsibility and commitment made by their customers to comply with the requirements of their platform’s parity score, a figure calculated based on the price of the hotel in all of its sales channels (including the channel direct). A measure that, from their point of view, should favor sales. It is clear, but … not through the official website.

The reality is that, behind all that, what really prevailed was the importance, and its intention, of being able to continue offering the best online price, even at the cost of seeing its commissions reduced. And its main competitor, Expedia, who probably felt identified as a collateral victim of his misdeeds, has not taken long to take notice and act accordingly.

As if it were a bad taste replica of that first earthquake, the impact of this recently implemented price equalization policy threatens to reprime the most disadvantaged hoteliers. Immersed still in this usual state of confusion and misinformation, so common after going through a catastrophe of such magnitude, which devastated a whole series of erroneous assumptions and pre-established principles, there are clear indications that this new phenomenon is a direct consequence of the previous one and the first investigations throw conclusions that return to shake the foundations of the direct sale.