Expedia stresses on rate parity and inventory parity for its customers

Expedia, Inc.’s CEO and president Dara Khosrowshahi spoke about recent discussions with Choice Hotels during the online travel company’s third quarter earnings call.

Published: 30 Oct 2009

Expedia, Inc.’s CEO and president Dara Khosrowshahi spoke about recent discussions with Choice Hotels during the online travel company’s third quarter earnings call.

“...As far as the discussions that we’ve had with Choice, we are not doing business with Choice right now on a chain basis. We don’t have a vast majority of Choice hotels on our side,” said Khosrowshahi, as per the transcript on Seeking Alpha. He declined to comment further on negotiations.

But he added, “First of all, our primary goal is to have the broadest, deepest set and highest quality set of inventory for the benefit of our customers. And this doesn’t signal any kind of change in our overall philosophy as far as how we work with our hotel partners and what we’re looking at. It’s not really an issue of economics; it’s more than issue of our wanting rate parity and inventory parity for our customers.”

“When our customers come to Expedia, we want them to know that they’re getting the best prices and certainly, we are insistent on that. And to the extent that Choice doesn’t want to work under those terms. We won’t be doing business with each other. Those are the terms that we work with our others strategic partners, they’re comfortable where they were comfortable with it. So, its nothing usual from what I would say is typical practice for us in most of our other OTA competitors so to speak.”

“The good news for us and kind of for Expedia shareholders is that when we look at the recapture analysis, when we look at our bookings in Choice, markets versus or markets where we have Choice presence versus markets where Choice doesn’t have much of a presence, it looks like we’re recapturing the vast majority of the bookings. So, as far as the financial impact for us, it is minimum to none. And hopefully, we can get to a place where we can or put Choice on go forward basis. But right now, really is not a big deal.”

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