Expedia looks to strengthen grip on Aussie tourism industry
In an effort to develop more content and campaigns to increase international travel to Australia, Expedia group and Tourism Australia reached a three-year multimillion dollar Memorandum of Understanding (MoU) earlier this year.
This first year of the partnership will focus on major campaign activity in two of Australia’s highest volume and highest-spending markets, the U.S. and the UK. Over the course of the three-year deal, marketing activities will be extended to additional regions of the world.
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In addition, the agreement will also include shared reporting on consumer insights and data analytics as it attempts to extend past marketing.
The formal agreement is the first Tourism Australia has entered into with a global online travel agency, as managing director John O’Sullivan acknowledged it was a strategic move to focus on partnerships to increase travel bookings and end yield.
“Expedia is one of the world’s leading travel companies with 20 years of experience of generating travel sales,” said O’Sullivan. “Our research shows our target customers are increasingly turning to online travel agencies when it comes to booking travel which makes Expedia an ideal conversion partner.
“Partnerships are critical to Tourism Australia in terms of us increasing our customer reach, providing cut-through for our destination messaging and ultimately making it easier for consumers to plan, book and buy quality Australian tourism products."
Between Expedia and its rival Priceline, the two control about 80 per cent of the market for online hotel bookings in Australia. However, hotels are urging the competition regulator to consult with Australian hotel operators about the unfairness of price parity clauses established by online travel agents.
The three per cent increase in commission rates for major online travel planners (from 12 per cent up to 15 per cent) follows Expedia’s buyout of Brisbane-based Wotif last year for over $700 million. In several other countries, Expedia and Priceline charge as much as 20 per cent commission.
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However, the rates in the Aussie market were lower when Wotif was a major factor. But since Wotif was taken over, online booking has turned into a duopoly similar to Coles and Woolworths in the supermarket sector.
Due to price parity clauses, hotels are unable to offer direct bookings for a room for less on its website than it can through the online travel agents. In addition, hotels must also ensure even its last free room must be made available on the online travel sites.
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Direct bookings would be prosperous for hotels, as they would be able to offer discounts of 10 per cent, but wouldn’t need to pay the 15 per cent commission to online travel agents.
While large hotel chains such as Hilton and AccorHotels are able to get around a portion of the parity clauses by offering special benefits such as breakfast, late checkouts or free Wi-Fi, smaller hotels have fewer options due to not having much negotiation power with the online travel agents.
Timeline: India takes unicorn leap with six in five days
We chart an historic week in India’s tech industry, where in just five days, between 5-9 April 2021, the country achieved six new unicorns, bringing India’s total to 10 in 2021 to date, an immense unicorn leap from just seven in 2020 and six in 2019.
April 5: Meesho
India’s first social commerce unicorn, Meesho raised US$300m from SoftBank, Facebook and Shunwei Capital, giving the Bangalore-based startup a US$2.1bn valuation, a threefold jump from its previous funding round in 2019. Founded in 2015 by two IIT-Delhi graduates, Meesho connects producers and resellers, helping small businesses sell through social media. It has 45m customers and has enabled 13m entrepreneurs to start their online businesses with no investment.
April 6: CRED
Founded just over two years ago, Bangalore-based credit card repayment app CRED raised US$215m from Falcon Edge Capital and Coatue, nearly trebling its valuation to US$2.2bn from its January US$80m round. Allowing customers to pay off their credit card debt while earning CRED coins which they cash in for rewards, CRED has grown rapidly during COVID-19, doubling its customer base to nearly 6 million in a year.
April 7: API Holdings / Groww
The first epharmacy startup to gain unicorn status, PharmEasy (API Holdings), which has digitised 60,000 brick and mortar pharmacies and 400 doctors across India, raised US$350m in a round led by Prosus Ventures. Founded by four former Flipkart employees as a way of making investing simple, investment platform Groww became India’s second-youngest fintech unicorn, raising US$83m in Series D funding led by Tiger Global, quadrupling its previous round in September.
April 8: ShareChat
New Delhi-grown social media startup ShareChat, founded in 2016 by Mohalla Tech raised US$502m from Lightspeed Ventures, Tiger Global, Twitter and Snap taking its raised total over six rounds to US$766m and pushing its valuation to US$2.1bn. The funding will be used to grow its user base and short video platform Moj, which launched in 2020 following TikTok’s ban in India. The regional language startup claims 280m users.
April 9: Gupshup
AI-led conversational message startup joined the unicorn club after raising US$100m from Tiger Global giving it a ten-fold valuation of US$1.4bn. The smart messaging platform, which has seen accelerated growth during the pandemic, was founded in Bangalore in 2005 by serial entrepreneur Beerud Sheth, whose online freelancing platform Elance is now listed. Gupshup’s API enables 100,000+ businesses to build messaging and conversation experiences across 30+ communication channels.