CHH CEO on EXPE: LRA and MFN

CHH CEO on EXPE: LRA and MFN

Choice Hotels’ CEO Steve Joyce just spoke with Hotels Magazine about the current issues at hand - taking the fight into the streets.

According to Joyce, it sounds as if the issues came down to six letters: LRA and MFN. In other words, Expedia is asking for Last Room Availability whereby they will have access to the entire hotel’s inventory during both periods of market strength and weakness. MFN refers to a Most Favored Nation clause by which Expedia is asking for parity vs. other channels.

Choice is concerned that they will still have to offer rooms to Expedia (at the standard margin) even when the hotel is expected to sell out, depressing yields. In contrast, Expedia’s concern focuses around providing consumers with inventory at all times, not just when the hotel “needs” business - it is about product consistency.

Choice would also prefer not to offer Expedia all rate plans and programs - possibly to allow special rates or packages on their branded websites etc. Obviously, Expedia would like to always have competitive pricing in order to keep consumers coming back in a hyper-price competitive marketplace.

These are gross simplifications of the issues at hand - Expedia is certainly not getting any style points right now in what is being pitched as a David vs. Goliath war.

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