Expedia plans to stop selling packages from Canadian tour operators on Expedia.ca.
TravelPulse Canada recently learned that this major overhaul – representing estimated annual sales of $300-350 million – is coming.
We have contacted Expedia Group and received the following statement:
“The packaging market is vast and attractive. Expedia Group currently competes in this market by both creating our own packages and sourcing pre-bundled inventory from tour operators,” an Expedia Group spokesperson said in response to TPC’s inquiries.
“Since tour operator pre-bundled inventory is not sourced directly from Expedia Group sourcing partners, this may result in an inconsistent experience for our travelers. For this reason, we are evaluating the best way to deliver packages sourced from third-party tour operators on Expedia.ca and through Expedia Cruises.
Following the initial release of this story, Expedia Group sent a message emphasizing that “there are no changes to the business of Expedia Cruises being assessed.”
The company also noted that it had not confirmed the August 23 date, a source listed as the end date for Canadian tour operators’ package sales on Expedia.ca.
The Expedia spokesperson added: “As we have indicated on previous earnings calls, all of the changes we are making to our organization are aimed at sharpening our focus on doing less and being great. We continue to assess and evolve our priorities and our teams to focus our efforts in the areas of greatest value.
Richard Vanderlubbe, president of hybrid online/in-store travel agency tripcentral.ca, said he was “a bit surprised” by Expedia’s decision.
“It’s quite a statement that selling pre-packaged tour operator products in Canada isn’t worth it. This would mean that the revenue generated by this segment was not worth it in terms of transaction or service. That may be true, but perhaps the unspoken reason is that it might be in their interest to promote their own dynamic flight plus hotel packages.
How well could Expedia’s dynamic packages compete with the products of major Canadian tour operators? “We’ll see,” Vanderlubbe said. “The proliferation of low-cost carriers combined with Expedia’s buying power in hotels cannot be ruled out.”
Vanderlubbe added: “Well-established tour operators need to be careful not to be disintermediated by their own airlines offering favorable airfares for packing. If not, it could be back in the future – you never know.