EXPEDIA is slashing its commission rate from 25% to 10% for local suppliers on bookings made within 28 days on its Australian website. The Expedia rate will stay at 25% for all other bookings. It’s a major strategic shift for Expedia, which has faced resistance from Australian accommodation owners, who are paying market leader Wotif.com 10% commission for much higher volumes. The issue was brought to a head last year when the region’s largest hotelier, Accor Asia Pacific, pulled most of its brands except for high-rate Sofitel from Expedia, citing high commission as the issue.
At this stage Expedia’s commission cuts only apply to its activities in the Australian market. The move was flagged by several industry players on both the supply and distribution side at the No Vacancy conference last week. Distribution costs are a major issue in the bullish Australian accommodation market. Rachel Argaman, Chief Operating Officer of Toga Hospitality, told delegates that the group refuses to pay more than 10% commission. “If a contract comes across my desk and it has a different figure I cross it out, write in 10% sign it and send it back,” she told No Vacancy delegates. Her stance was reiterated throughout the day by a wide range of suppliers. Travel Trends: April 23, 2008