28 November 2010

Where You Book Matters – Yes Really…



Hark back to a simpler time. Back when the use of influence was very important. You went to the person who you knew who had more influence if you wanted things done. That always mattered from the time you were just crawling around – if you wanted something done – every child knows go to the parent who will respond to you and give you what you want. In school it mattered which teacher you asked for a reference… it matters still today – perhaps even more so.

But as you got older you realized that the biggest person wasn’t always the one who got what you wanted. Sure the bully could always get something by throwing his weight around but smart people always found ways around things. Under despotic regimes passive resistance has been one of the most effective forms of protest.

So it is with a lot of amusement that I view how my Alma Mater has been pushing its current ad campaign. The premise behind the current ads is that Expedia has more influence on the supply chain as the World’s largest travel intermediary. The corollary to that statement is “And we get you the Best Deals and Best Service”.

So lately I have been asking – unscientifically I hasten to add – what the attitude is of vendors to Expedia and how they treat Expedia’s customers. I also trawled through a lot of blogs and commentaries. That makes it harder to assess because Expedia owns TripAdvisor the number one consumer comment organ. However there are clearly a few examples which can point to evidence of something most savvy travel consumers know intuitively – buying direct gets you something better than buying indirect.

I can tell there is a significant friction in those relationships. I spoke to several hotel players in different parts of the world. Both individual and chain based. I chose hotels as the category because I think the people I spoke to – under conditions of assured anonymity – would give me a more straightforward answer, more comprehensively than say an airline would.

The sense I got was entirely logical and expected. The Hoteliers in the main felt that Expedia had squeezed significant margins and therefore if the hotel had a way to recover value back they would do it. The usual form of that value was for the hotel – again logically – to give preference to their direct customers over those from Expedia. Indeed some of the hoteliers were very specific in that they would place Expedia deliberately at the bottom of the heap after all other intermediaries. This was particularly true in the case of high volume properties.

Expedia has acquired a bit of a “bully boy” tag and that was surprising to me. I would have thought that Expedia would behave. Expedia has a history of throwing its weight around. However I would have expected that the recent ascendency of Priceline would have changed their behavior into the kinder gentler Expedia that started out in 1996. Apparently not so.

So the moral of this story is… where you buy does matter. But don’t expect Expedia to get you the best service even if they got you the best rate. But there again that is true of almost everything you buy. It’s just that most retailers don’t make an issue of it without clear value and case history to back it up. (Can we now expect a series of testimonial ads now from Bellevue?)

1 comment:

Anthony said...

Good post, i have seen these kinds of comments cropping up, both from hotels and from more savvy consumers.

Hotels offering better service to direct bookers is understandable but dangerous. Most customers will not understand the distinction, the hotel will lose a repeat customer, and ultimately, it's the hotel that loses out.

Not an easy situation to be in, but probably better for hotels to deal with upstream (with Expedia) rather than downstream (with the customer).