Hot off the press
As you may be aware, Expedia Lodging Partner Services Sarl; Travelscape LLC; Hotels.com LP; VacationSpot SL; and BEX Travel Asia Pte Ltd (formerly named AAE Travel Pte Limited) (collectively, “Expedia” or “we”) have been engaging with the Australian Competition and Consumer Commission (ACCC) regarding the clause in relevant agreements with Expedia’s Australian hotel partners in which you have agreed that room rates you provide Expedia will be equal to or lower than those offered by you through your own online booking or distribution channels. This provision is often referred to as a narrow rate MFN provision.
As background, our narrow rate MFN provision was introduced to support offering competitive offers to consumers searching and booking your hotel rooms through Expedia. Beyond its contractual implications, we believe our narrow rate MFN provision reflects an important commercial principle – that is, we expend our efforts and resources promoting your rooms, and the vibrant and growing Australian tourism market generally, and we hope you expend your efforts and resources to make available competitively priced rooms to your (future) customers who find you and book through Expedia. This ensures that you, and your customers, receive the full benefits of your listing on Expedia.
We work hard every day to present a highly intuitive consumer-facing online travel marketplace that enables consumers to find their best travel options quickly and efficiently, with the goal of making the travel search and booking process easy to navigate and thereby increasing travel overall, which we believe benefits the individuals traveling, the destinations they travel to, and helps stimulate global economic growth. In this way, we have always considered our narrow rate MFN provision to be part of this overall goal, ultimately mutually beneficial to hotel partners like you and Expedia.
Nonetheless, we recognise that our narrow rate MFN provision has become the source of contention with some industry participants and that this has led to the ACCC review. That is why we have decided to modify our lodging agreements with our Australian hotel partners to remove any narrow rate MFN provision, if removal is permitted in your agreement and, whether or not removal is permitted in your agreement, waive any rights we may have to enforce them, on the terms set out in a Deed of Waiver and Notice of Amendment, a copy of which can be found here. We are taking this action without any admission of any wrongdoing and without any prejudice to any arguments as to the effect of such provisions.
The purpose of this email and the attached deed and notice is to provide you with further details on how this decision will affect your lodging agreement with Expedia.
While you are free to charge higher rates on Expedia’s marketplace than on other channels, including your own site, I’d like to highlight that providing your best prices, content, amenities and general hospitality to Expedia’s incremental consumers has always been and will remain the most effective way to convince consumers to choose your property over your competition and maximize your exposure and room night potential on our marketplace. This gives you an opportunity to attract and delight more and more new consumers, leading them to come back to your property either through our channel or through your own. As proven by decades of data analysis and surveys, price is a critical element in consumers’ decision-making process, hence why it is one of many factors we take into account to differentiate otherwise similar hotel offers in our marketplace. This consumer-centric approach is fundamental to our business and will continue to be a key focus for us.
You do not have to do anything in response to this email. However, should you have any questions, please contact your Expedia Market Management team direct as that will be the quickest path to addressing your questions. Also for your information, the original version of the attached deed and notice shall be held in our offices at Level 18, 1 Martin Place, Sydney and shall be available for inspection during normal business hours upon request.
We look forward to continuing our successful partnership with you, and to continue delivering profitable incremental bookings for your property.
Yours sincerely,
Cyril Ranque
President Expedia Lodging Partner Services
Expedia® Lodging Partner Services
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