The hotel distribution space could be in for a massive shake-up as talks over fees between Expedia and Marriott are said to be in their final stages.
Last week, a financial analyst said the pair were negotiating a new commission rate, which could ripple through the entire industry as other large hotel chains look to flex their muscles.
Hotel industry analysts say it’s a good time for Marriott, and possibly others, to be negotiating, given the strong business environment of recent years.
Phocuswright analyst and hospitality specialist Robert Cole says the hotel industry in the United States has seen nine consecutive years of increases in revenue per available room, which is driving Marriott to “lock in lower OTA compensation terms” before any downturn in economic fortunes.
In addition, Marriott has a significant size advantage after its acquisition of Starwood Hotels & Resorts in 2016.
He points to other dynamics at play, including the desire from large hotel groups to attract independent hotel owners as franchisees who might be lured by lower OTA fees.
It’s not all one-sided, however, as Expedia has its own leverage and will be seeking concessions from Marriott.
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