Expedia Group announced a $275 million recovery fund for Expedia’s partners including money earmarked for hotels, destinations, and vacation rental owners. At first glance, this is a huge win for everyone involved but let’s take a closer look at what this program actually includes.
Breaking Down Expedia’s Program
The $275 million is a huge sum, but the company isn’t offering direct cash infusions for its partners. According to Expedia’s press release:
Expedia Group is committing $250 million in marketing credits and financial relief. For each property that participates in the program, the company will reinvest 25% of the compensation earned in 2019 from the property into marketing credits for use with Expedia Group.
Expedia Group’s Press Release — Yahoo Finance
The program sounds great on its surface, but a deeper examination shows that $250 million, or about 91% of the program’s total of $275 million, is earmarked as marketing credits. As Skift noted, this means that the money is not simply a giveaway, and any utilized funds will still benefit Expedia.
Marketing credits are great, but these advertising dollars might not be enough to replace revenue lost due to Covid-19.
Cyril Ranque, president of the company’s Travel Partners Group countered that the fund is beneficial because marketing resources provide the best way for Expedia’s partners to regain market share as countries across the globe reopen.
Vrbo Hosts Not on the Expedia Platform are Left Out
One group that is not included for the monetary aid are Vrbo hosts who have not moved over to the Expedia platform — this means that only 36% of existing Vrbo hosts are eligible for any form of relief. These hosts are likely to be larger owners with many listings, instead of individual property owners with a single or a few units.
Other companies have offered similar relief funds that have been criticized as being insufficient.
Airbnb’s $260 million relief fund for rental owners differed from Expedia’s in that it provided direct payments to rental hosts. However, it has been criticized for its slow setup time and small payouts — frustrating some rental owners and causing them to leave the platform.
Caveats and Additional Measures
Expedia has earmarked an additional $25 million to revitalize destinations. Other solutions included in the company’s plan include expanded proprietary data access, supply chain optimizations, global brand campaigns, and training programs targeted at furloughed workers.
Not all of the $275 million will be available at once, and the figure is an estimate. The actual amount will depend on how many partners take advantage of the fund. The financial components of the fund will become available “based on recovery signals, including demand trends from […] specific markets.”
