Expedia is letting hotels buy their way toward the top of some search results through a new bidding program.
The “Expedia Accelerator” program, which started rolling out last quarter, has been in the works for a year, according to a new interview with Expedia CFO Mark Okerstrom at travel news site Skift today. It would see Expedia’s various hotel and airfare websites turn into marketplaces for travel bookings.
“We have transitioned our business over the course of this last year and we are going to continue to transition in 2016 to much more of a marketplace,” Okerstrom told Skift. “You know a marketplace where hotels can compete against the right people—not us—compete against each other for the vast amount of traffic and bookings that our booking platforms and fantastic brands around the world provide.”
The exact details on the program aren’t public, but it allows hotel properties to bid for placement in select slots on search result pages. But hotels won’t be able to just buy their way to the top of every search result. They’ll still have to match other needs the consumer is looking for.
“And the hotels that ultimately are successful in getting the maximum exposure to our consumers generally do a few things,” Okerstrom said. “One is they provide our customers great rates and they also provide them great availability—rooms at important peak times. When we do that consumers click on them and they book on them and the way that our marketplace works is when that consumers see something they like and when consumers vote for a hotel with their bookings they rise up in the sort order and those hotels that do not offer an attractive product generally suffer.”
The Accelerator program is just starting to roll out now, and it’s only in a few markets at the moment, according to CEO Dara Khosrowshahi, who spoke about it on yesterday’s earnings call. But the company says partners are pleased with the process and are seeing good results across Expedia’s websites, which includes Hotels.com, Orbitz and Trivago.
While the company didn’t meet fourth quarter expectations when it released results yesterday, investors aren’t deterred. Expedia stock is up nearly 10 percent so far today thanks to a rosy outlook for the future. With key acquisitions of Orbitz and Airbnb competitor HomeAway, along with this new marketplace model, the market seems to believe Expedia is poised to bounce back from its $12.5 million quarterly loss.
