How Fat Are Expedia’s Hotel Margins?

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Lasts week, I stayed at a property in eastern Bali that I had booked using Expedia. I invoked Expedia Price Guarantee, as the hotel was available at a lower rate on Booking.com. You can read my experience of using Expedia’s price guarantee here.

expedia-margin

When I was checking into the property, I had a peek of the reservation confirmation that the property had received from Expedia by email and took a photo of it using my phone. It showed the pricing and other info for the hotel to process the payment from Expedia for my prepaid stay.

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The total price on Expedia was $67.92 ($11.79 taxes/fees) and the total that the property got reimbursed was $50.94 ($8.84).

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The Expedia’s margin off of the $67.92 price was exactly 25% that cannot be a coincidence.

Of course, there is a note at the bottom of the email to remind the property to not to show the confirmation to the guest.

Conclusion

No wonder, why the properties wish to generate more direct bookings, if Expedia’s margins are in the tune of 25%.

Also, Expedia has inherently a conflict of interest, when it shows the “best matching” hotels for any one city. Do they show the hotels that are truly best match for the traveler or the ones that generate the fattest margin for them?

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