Groupon and Expedia are scaling back a 3-year-old partnership that focused on selling heavily discounted travel deals together.
A Groupon spokesman confirmed today that the daily deals company and the online travel agency are no longer co-branding deals through a joint venture launched in the summer of 2011.
The travel deals site, which was originally called “Groupon Getaways with Expedia,” was announced the same day in June that the daily deals giant filed to go public.
At the time, Expedia couldn’t have landed a flashier partner to launch the popular new business model. But fast-forward three years, and the daily deals heyday has lost steam. Groupon is no longer the rising star it once was, while the Bellevue, Wash.-based company remains a powerhouse in travel.
While the consumer-facing side of the business has ended, the two companies continue to work together, Groupon said. “Expedia remains an important supply partner for our fast-growing Getaways business. However, we are no longer co-branding,” said Groupon’s Nicholas Halliwell, in a statement.
Yesterday, Expedia sent out emails “Introducing Daily Deals.” In the email, it said customers can save up to 50 percent on deals that end at midnight. Nowhere in the promotion, or on the website, does it reference Groupon. Similarly, Groupon’s Getaway site no longer references Expedia.
The relationship potentially dissolved because they simply didn’t need each other anymore.
“We’ve been incredibly successful on our own at promoting travel deals to our more than 200 million subscribers and sourcing our travel Flash Deals inventory primarily through the Groupon Getaways sales team,” said Groupon’s Halliwell, who added that “hotel” is one of the top search terms on Groupon.com and the Groupon mobile app.
Essentially, there’s little left of the joint venture as it was originally intended to be.
As of January, Groupon partnered with the Expedia Affiliate Network business unit to source the Groupon Getaway’s marketplace, which offers the ability to book rooms at 20,000 hotels worldwide. And Groupon says it is no longer promoting deals on Expedia.com or Hotwire.
An Expedia spokeswoman provided this statement, saying it provides context for why the relationship between the two companies has evolved: “Expedia has several demand generating deals programs for our partners that are more integral to the overall Expedia distribution strategy. For example, Expedia’s ASAP program has expanded from offering 6,000 hotel-only deals in 2012 to become a successful daily program offering nearly 20,000 hotel and flight + hotel package deals in 2013.”
But just a couple of months into the relationship with Groupon, Expedia was second-guessing itself. At the time, Expedia’s CEO Dara Khosrowshahi was happy to report it had sold an astonishing 15,000 deals in just three months, but was worried about the incremental value of Groupon to its business.
In a quarterly earnings call, he said: “Are they coming back and using Expedia for their other travel needs? Groupon has been a strong partner for us. And I think over time, and especially into next year, we’re going to figure out what the best approach is going to be.”
Of course, it may also come down to economics.
Expedia and Groupon were splitting the revenue made from the travel deals (often times, Groupon receives up to 50 percent of the sales price on a deal, but in this case, it was giving half of it to Expedia). By taking a standalone approach, in theory, both Expedia and Groupon could receive more revenue from deals sold.