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Choice Hotels' Stand against Expedia Wins PraiseOctober 26, 2009 By: George Dooley
As a sidebar to the clash between Choice Hotels and Expedia, AboutAnywhere.com, a direct to consumer low cost online agency, released a statement applauding Steve Joyce, CEO of Choice Hotels, for “standing up to Expedia,” a major online player, over agreements. A breakdown in negotiations between Choice and Expedia resulted in an impasse that ended Expedia’s offering Choice properties.
“It takes a lot of courage to do what Choice has done and I congratulate Mr. Joyce,” said AboutAnywhere.com CEO Ashwin Kamlani. “This should serve as a clear signal to the OTAs that the hotel industry refuses to fall victim to the same mistakes that were made after September 11, 2001. It is completely unreasonable for an OTA which demands such a high percentage of the hotels’ reservations revenue to require last room availability.
“Objectively speaking, if a hotel is certain that they can fill their last rooms through their own direct channels, they should do so without hesitation. Expedia’s demands are also unrealistic," Kamlani continued. "Anyone from the industry will tell you that regardless of what you force a hotel to put into the contract, the hotel is going to do whatever is necessary to maximize its profits. This is why they need an army of market managers all over the world to enforce these outrageous policies. Forcing the hotels to commit financial suicide in a contract is just a product of arrogance.
“Most of the new companies that are emerging in the online travel space are focusing on a small niche, like mobile platforms or travel reviews," Kamlani said. "It has been a long time since a new Online Travel Agency (OTA) has emerged, and this means that hotels today are forced to choose between the four major OTAs, since the other smaller OTAs have been consolidated under these four companies, giving the four major OTAs the majority of negotiating power."