It's an evolution of OWW's global, multi-brand strategy, where its core hotel business model varies from region to region.
In North America, where full-service online travel companies Orbitz.com and CheapTickets.com prevail and vacation packages are vital, and in Europe on ebookers' turf, OWW sees the merchant model remaining its dominant practice.
But, in parts of Asia-Pacific, Orbitz will tweak the RatesTogo.com modified retail model by expanding the booking window from 28 to 365 days, and in many markets OWW will designate HotelClub as the lead brand.
RatesToGo is a unit of OWW's HotelClub, a hotel-only site that is strong in Asia-Pacific and Europe. Today, HotelClub uses the merchant model for gateway and other major destination cities, and RatesToGo uses the modified retail model, where consumers prepay the RatesToGo commission and booking fee in the form of a deposit and pay the balance to the hotel upon checkout.
The commission generally is 10 percent to 15 percent.
Mike Nelson, president of the Orbitz Worldwide Partner Services Group, said the strategy soon will change so that HotelClub will be the lead brand in emerging markets and in "secondary cities" in Asia-Pacific, and HotelClub will offer both the merchant and modified retail model with the longer 365-day booking window.
However, the strategy will vary market to market, Nelson said, with RatesToGo and HotelClub coexisting in the current status quo in Australia, for instance, where RatesToGo is strong.
OWW's initial focus for expanding the modified retail model from last-minute inventory to bookings 365 days' out, and pairing it with merchant model rooms on HotelClub is in Asia-Pacific, Nelson said, but he doesn't rule out a broader rollout.
Asia-Pacific is fertile ground for the modified retail model because, among other advantages, it eliminates the need for the hotel to set up a commission-payment system, Nelson said.
And, that makes it easier for HotelClub to sign new hotel partners, especially among smaller or independent hotels.
And, in focusing on a niche of emerging markets and secondary cities, OWW may be able to avoid head-to-head competition with some of the region's strongest hotel players like Ctrip in China and Rakuten in Japan.
At least, that's the hope.
Oh, by the way, HotelClub's new modified retail model will have it's own catchy branding.
At least, that's the hope, too.
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