by Mia Taylor
Last updated: 3:19 PM ET, Fri April 12, 2019
Marriott and Expedia have entered into a new multi-year agreement that allows the hotel giant's listings to continue to appear on the well-known travel website.
The new deal was announced Thursday and is notable for being the first agreement between the two entities since Marriott became the world's largest hotel company, thanks to its 2016 acquisition of Starwood Hotels.
The companies had been working under an extension agreement after the previous contract expired in November.
While few specifics of the deal have been released, CNBC reports that Marriott was able to negotiate a new commission rate with Expedia, the amount of which has not been disclosed. The last reported commission rate between Expedia and Marriott was 12 percent.
Marriott's CEO, Arne Sorenson, told Reuters last year that the company was trying to cut commissions for online travel agencies. Sorenson said the fees take a large chunk of a hotels' profits.
According to various media reports, the newly inked deal between the two travel industry giants continues Marriott's arrangement with Expedia for booking last-minute guests. It also expands Expedia's role with Marriott's leisure packaging platform.
Additionally, during the fourth quarter, Marriott and Expedia will launch a distribution arrangement that covers more than simply last-minute bookings.
Zacks further reports that the new deal with Expedia is particularly critical for Marriott as online booking becomes more and more important in the lodging business and drives significant growth.
It remains unclear what impact, if any at all, this deal will have on travel agents.
Julia Matheson, owner of Travel Julia's Way, described the newly announced contract as largely a non-issue for the agent community.
"The majority of my clients come to me and hire me to help them plan vacations for my service and expertise-not my ability to book hotels online," Matheson told TravelPulse.
"They're savvy travelers who know that a good trip is made up of more than a hotel and a flight, and want to be able to have higher-touch service than calling an 800 number and dealing with automated and terrible customer service. They want advice from someone they know and trust, not a bunch of online reviews that come from unknown and non-transparent sources."
George Andritsakis, of George the Travel Genius, offered a similar assessment of the news, pointing out that it is too early to tell what impact the new deal between Marriott and Expedia will have. However, Andritsakis added that there could be some potential negative fall-out.
"It has the power to unhinge every smaller, independent travel agent out there, selling Marriott at higher rates and lower commissions," Andritsakis said. "On paper, as far as is known, the deal is only good for those huge corporate travel agents who have agreements with the OTAs like Expedia, but it has the potential of shutting out the little guy who only has a fistful of corporate contracts or uses Marriott when booking leisure."
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