Expedia CEO to Hotel Owners: Stamp Out Rogue Wholesale Rates - Yahoo

Excerpt from Yahoo

Expedia CEO Peter Kern pled his case to hotel owners Monday: Take seriously the billion-dollar issue of wholesale rates being misused online.

“It’s a growing problem,” Kern said Monday. “There is a massive amount of rates leaking out.”

Kern spoke on-stage at the Americas Lodging Investment Summit (ALIS) in Los Angeles. It was the first time the head of a major online travel agency was invited to speak at the conference — arguably the largest one for hotel owners and developers.

Some backstory: Hotels have long set aside some rooms at discounted wholesale rates for contracted partners to offer to specific, coveted travelers. A hotel might offer wholesale rates to a tour operator to bundle with a flight in a discounted vacation package, for example.

Kern complains that some agencies are breaking the rules.

“Wholesale rates get out in the world where they’re unintended, and ‘unintended’ means they are available at the retail marketplace on other OTAs [online travel agencies] and comparison sites,” Kern said. “All of a sudden, people are showing up at your front desk with a rate that your desk doesn’t know how the hell it got there.”

Kern’s team at Expedia has worked with Marriott and other major hotel chains to curb the distribution of rates. However, the “wholesale leakage” problem continues to plague independent and regional hotel groups.

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