Several major hotel chains in Norway are cutting their ties with Internet giant Expedia and dropping out of Expedia’s hotel reservation service Hotels.com. Their executives cite “sky-high commissions” and Expedia’s alleged demands that the hotels can’t offer any lower rates themselves on their own websites than what Hotels.com offers.
“We can’t live with the commissions Expedia is demanding,” Morten Thorvaldsen of Thon Hotels told Norwegian business daily Dagens Næringsliv (DN), claiming the commissions vary between 18 and 25 percent. “Nor can we live with Expedia’s demand that we can’t set our own room rates on our own websites.”
That alleged demand, cited by several other Norwegian hotel chains, also has raised concerns that it would violate competition regulations in Norway. Expedia, the hotel operators fear, holds far too much market power to steer room rates in Norway if the hotels themselves can’t. International hotel organizations have also worried that the number of online booking services has been greatly reduced to a few players who how hold huge market power.
Thorvaldsen of Thon, which also has hotels in Sweden, Belgium and the Netherlands, noted that a large, international hotel bookings player like Expedia “represents an important channel” and “we would gladly cooperate with them, but then the conditions need to be changed considerably.”
He said Thon would drop out of Hotels.com from January 1, following the First Hotels, Scandic and Nordic Choice hotel chains who are doing the same. All told that amounts to around 500 hotels leaving Expedia’s program and opting to instead build up their own websites and offers.
The high-end chain De Historiske, which specializes in historic hotels around Norway and those with special charm or locations in scenic areas, is also recommending that its 44 member hotels reconsider their cooperation with Expedia. “They simply take exorbitant commissions,” Nils Henrik Geitle, director of De Historiske, told DN.
Kjetil Smørås, owner of the venerable Grand Terminus Hotel in Bergen and the Augustin, both members in De Historiske which runs its own booking website, said Expedia demanded, in practice, to have full control over his hotels’ prices and rooms. “The conditions were hair-raising,” Smørås told DN. “We have cancelled out agreement. We couldn’t let it continue.”
This week DN reported that Best Western Hotels in Norway also has advised its member hotels in the country “against renewing their agreements with Expedia/Hotels.com under the conditions that exist today,” director Hege Ramm of Best Western Hotels told DN. Since Best Western is a membership chain of individually owned hotels, “we can’t do more than make a recommendation.”
That leaves just Asker-based Rica Hotels and Rezidor, which runs the Radisson Blu and Park Inn hotels in Norway, in Expedia/Hotels.com and its local director for Scandinavia didn’t want to answer questions about the mass defection. DN reported that she wrote in an e-mail that she would gladly take the opportunity to “give a bigger and more detailed picture” of Expedia’s difficult relations with Norwegian hotel chains at present.
“But as you may understand, I have a lot to handle with this situation,” she wrote. “We clearly have some work to do in Scandinavia.”
Views and News from Norway/Nina Berglund
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