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Expedia appears to be embracing a potential shift to a marketplace model.
Last week, the company's president and CEO Dara Khosrowshahi discussed the rollout of Expedia's "Accelerator" program in limited markets.
The program, which allows hoteliers to bid against one another for better placement on Expedia.com, signals a significant transition in models. Khosrowshahi addressed that shift during a recent interview with CNBC.
"We want to get to a much lower price point to make sure that we have the broadest supply out there on a global basis," he said. "We're adding hotel supply now at record levels. We have over 270,000 hotels. We're going to augment that with HomeAway inventory as well. And the model that we want to move to versus a fixed price is much more of a marketplace model."
"We're introducing a model where hoteliers can essentially bid for placement and to the extent that you're competitive with your pricing, your content, you've got terrific pictures and you treat our customers well you're going to move up in the Expedia marketplace," added Khosrowshahi.
Therefore, hoteliers will still have to impress consumers with solid prices and availability.
"We think that's a much better dynamic model versus a fixed price model."
Khosrowshahi said so far the transition is "going really well," pointing out that "supply is increasing and the customer demand is increasing at a very significant rate."
Although there's no timetable on if or when the Accelerator program will be expanded to include more markets, a potential full-scale shift could ultimately change how hotels compete against one another, with hotels upping their bid when desperate for volume.
If Expedia continues to embrace the marketplace model and sees success, direct competitors like TripAdvisor and Priceline could follow suit by introducing similar programs of their own.
While under Expedia's current conditions hoteliers can't simply pay for positive reviews, it remains to be seen how travel consumers would be impacted by a larger scale shift to a marketplace model.
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