IQ news: Expedia Signs Hotel Sites To Homepage Placement

Microsoft’s online travel site Expedia will today announce multi-million dollar deals with three hotel suppliers in what is likely to be one of the largest single hotel ad buying pacts on the Internet. Dollar amounts were undisclosed.
Hyatt Hotels, Starwood Hotels and Resorts Worldwide and hotel wholesaler secured deals for permanent placement in a new featured hotels section on Expedia ‘s front page. The move represents new ad inventory and a change in Expedia’s strategy; ad deals had been limited to placement on Expedia’s directories and banner ads on the front page.
Erik Blachford, director of advertising for Redmond, Wash.-based Expedia, says suppliers can build brands while driving traffic to their online booking sites.
While Expedia generates revenue from selling its online real estate, it also acts as a travel agent, generating commissions off its $12 million in air, hotel and car rental sales a week. These hotel deals are, in effect, syphoning off potential commissions by sending customers directly to suppliers.
“It depends on whether you take the long-term view or the short view,” explains Blachford. “The long term view is–if we don’t give both sides what they want we’re not going to build a sustainable business.”
Each will also enjoy promotional benefits, as well as category placement. For instance, will be listed in the discount hotel section as well as in the site’s Casino Destination area.
Expedia is selling five of these permanent spots on the site’s homepage for at least one year: Two to Starwood (which will market across its Sheraton, Westin, Four Points and Caesars brands), one each to Hyatt and, and a fifth to an as-yet-undisclosed hotel supplier.
Blachford insists that money is not the sole factor in who winds up in the slots. “It’s not about who’s going to write you a check,” he says. “It’s not in our interest to do anything where we think we can’t add value.”
While has never had any sort of agreement with Expedia, Hyatt and Starwood have had deals with the site since its launch in October 1996.