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.