Expedia abandons dimming practice with launch of new revenue management tool

Credit: Ryan McVay for Getty Images

Following months of media hazing for “dimming” some hotel listings, Expedia has formally announced today that the company will discontinue the practice by which images and other pertinent property details are stripped from certain listings. Reducing a hotel’s visibility on the site and, consequently, diminishing its booking potential, the practice was largely viewed as the OTA’s retaliatory response to the industry’s proactive push for more direct bookings.

But according to a July 28 Washington Post article, London-based OTA Insight reported that “slightly more than 1 percent of Expedia’s 260,000 hotel properties were dimmed.” The somewhat negligible number renders the summer’s negative media coverage and today’s subsequent announcement all but worthy of derision. Yet, in publicly retiring its dimming practice while simultaneously announcing the new revenue management tool Rev+, Expedia appears to be charting a new course in the tech company’s continuous evolution.

Live and Learn

“Because of Expedia’s ‘Test and Learn Philosophy,’ we’re constantly testing not only consumer products, but also new products for suppliers in order to gauge which generate the most positive reactions,” Cyril Ranque, president of Expedia’s Lodging Partner Services told HOTEL MANAGEMENT. “In the last few months, we measured the impact on consumers and gathered feedback from hotel partners and decided dimming is not the best method for achieving the best consumer experience. Some things are winners and some are losers and when they’re losers, they’re replaced.”

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While the elimination of dimming will not change the algorithm that Expedia uses to determine hotel rankings—based on quality scores, competitive rates and consumer-facing content—Ranque didn’t wax poetic about the brand’s “Test and Learn Philosophy.” Expedia ran 1,500 product tests in 2015, up from a mere 10 in 2010. Coupled with the tech giant’s $3.4 billion spend last year to promote the travel category, the company has a vested interest in its partners’ success. Leveraging Expedia’s data and technology to resolve issues that partners face,then, is a matter of improving the ongoing financial health of all parties.

“We don’t ask for a blank check or payment for three years,” said Ranque. “We try to find the minimum viable product that we can optimize for the partner and then if it works, we move to build a more sophisticated product and a contractual relationship that can be more defined. We’re also not trying to predict the long-term impact of a solution, but instead, we’re going for a quick implementation to a new product will solve the partner’s issue and if it is, we build upon it.” He cited Expedia’s recent RLHC and Vacations by Marriott initiatives as two examples of this practice in action.

Free Revenue Insights

Now slated for a progressive roll-out to hotel partners worldwide, the introduction of Rev+ is also a logical concomitant as it provides hoteliers with: a 90-day overview of market-specific; relative pricing information and pricing trends; daily notifications of changes in market-specific public pricing; and a market demand forecast. Part of the partner portal Expedia Partner Central and developed specifically for hotel revenue managers, the new revenue optimization functionality is available with no additional enrollment or fees. The data provided by the tool are acutely apropos to each individual property as hotel partners have the ability to customize market segmentation.

Although Expedia is only just bringing Rev+ to market, Ranque considers the functionality to be reflective of Expedia’s capacity for successfully powering partner products with incomparable data and technology. Comprised within Expedia Media Solutions, the pay-per-click program Expedia TravelAds, which can take customers to either a hotel’s information site on Expedia or link off directly to the partner’s website, has an 11 to 1 ROI, according to Ranque.  

“The industry is investing in technology to bring traffic to their brand websites and convert customers and process payments, but they have to invest on both web and mobile technologies across multiple platforms and most likely with a sub-scale result because these aren’t technology companies,” he said. “We can adapt the technology that we develop at a fairly reasonable market cost to us and make it available for the industry in order to make the industry more efficient at optimizing the customer journey and hotels’ efforts to reach consumers. There’s a global opportunity here to increase efficiencies and reduce costs for hotel owners and operators while also generating new sources of revenue for the industry.”

On the Horizon

Expedia is also adopting its technology to assist hotel partners in growing their share of room category upsells and cross-sell on-property activity bookings. Hotel partners also now have the option to offer consumers value-add promotions, including non-price benefits such as free spa credit and F&B vouchers, through the OTA.

“We definitely feel that we can help our hotel partners increase their RevPAR and these are areas where you can expect to see us rolling out new products over the next six to 12 months,” Ranque said. “Travel is growing two times faster than GDP, but while there’s more demand, it’s fragmented across multiple channels, countries and payment methods. So it’s not easy to capture that demand and our role is to provide an efficient marketplace for consumers to find the best product for their trip and for our partners to connect with those consumers.” 

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