Extranets are producing large number of bookings for Hotels throughout Asia and most Hoteliers don’t understand where these bookings come from. For example, 3 of the largest extranets, Agoda, Expedia and World Choice Travel each have thousands of independent Travel Agent web sites re-selling their inventory and rates. Here’s how it works.
An extranet affiliate is a business that re-sells another online Travel Agents content. The affiliate saves a lot of work in not having to deal with hotels for contracts, updating rates, customer support, etc.
Taking Expedia as an example. The hotel signs a net rate agreement with Expedia and the hotel is sold on Expedia.com, Hotels.com, and thousands of other websites on the Internet that re-sell Expedia’s inventory. The Expedia Affiliate Network has been very successful in the online travel business. Reservations aren’t under the Travel Agents name but Expedia’s.
www.cheaprooms.com is one of Expedia’s largest affiliates. They make millions of dollars each year in hotel bookings and its estimated that Expedia earns between 20% and 30% on each booking. A share of this is credited to the affiliate that brought the booking to Expedia. The more business the affiliate brings to Expedia, the higher the percentage they earn on each booking. Cheaprooms.com for example, is probably earning 15% on each booking, which means that they are probably earning more on each booking than Expedia! There are thousands of these affiliates. Expedia handles all of the customer service, transaction processing, and contracts with hotels.
