Expedia Group adds Mastercard to growing B2B lineup

On the heels of announcing 55% growth in B2B revenue in the first quarter to $668 million, Expedia Group has unveiled new plans for generating revenue from partners while doubling down on its tech focus.

Among the many announcements the company made at its Explore 23: Connect partner conference, it revealed a new partnership with Mastercard. Through this tie-up, financial institutions that issue Mastercard-brand credit cards can enable their cardholders to redeem credit card loyalty points for travel bookings made through Expedia. Expedia Group’s White Label Template allows issuing banks and merchants to “seamlessly integrate the solution to their existing customer interface, providing a frictionless experience for both cardholder and issuer,” the companies said.

Mastercard executive vice president of global loyalty, Stephanie Meltzer-Paul, said the company opted to partner with Expedia Group because of its global scale, innovation, strong customer experience and the “breadth and depth of their travel offerings.”

“With Travel with Rewards, we’re providing consumers choice in how they want to pay and underscoring the importance of building loyalty programs that provide real value,” Meltzer-Paul said.

“Our companies are uniquely positioned to deliver a more effective point redemption experience that’s easy to activate for issuers and allows cardholders to transform points they’ve already earned from everyday spending into the ultimate reward: their next adventure.”

Expedia Group said the partnership gives Mastercard customers access to global supply that includes more than 700,000 properties, 500 airlines and 100 car rental companies.

And Mastercard is just one of several financial services firms the online travel giant works with. Last week Expedia Group announced it is powering SoFi Travel, which will allow the financial services company’s members to book flights, hotels, cars, packages, activities and vacation rentals through SoFi.

Expedia Group also works with Revolut, Scotiabank, American Express, TD Bank and Royal Bank of Canada. Other B2B customers include Despegar, Flight Centre and Amex GBT.

Rollout of microservices

Expedia Group is also touting the growth of the microservices it is offering through Travel OS, the operating system that evolved from its Open World platform. Travel OS provides partners with access to individual technology solutions that they “can plug in easily and essentially enhance their business,” said Peter Kern, Expedia Group CEO. Open World will continue to be the external name for its Accelerator and Social impact and Sustainability programs.

The first microservice to reach commercial status is its fraud capability, and its service tech and revenue management API are in beta-testing.

Travel OS “quite literally gets smarter with every interaction,” and Expedia intends to incrementally roll out “many more” microservices through it, according to Kern.

“Think of these as new product rollouts, like any tech company would do, where you’re beta testing it, you’re making sure it’s rock solid and can handle the capacity,” Kern said. 
 
“We’ll make sure they’re ready for the market and then we’ll commercialize them and then we’ll take them to bigger and bigger enterprise partners.”

Another solution Expedia Group is exploring sharing with partners is generative AI.

Expedia Group launched a plugin for ChatGPT in late February and days later enabled the generative AI chatbot in brand Expedia’s mobile app.

“We’ve even talked about potentially externalizing AI and machine learning because most travel companies don’t have the hundreds of data scientists we have to build algorithms, to build artificial intelligence,” Kern said.

Optimizing distribution

Also on Tuesday, Kern called optimized distribution “one of our great success stories in the B2B space,” describing it as “how we help partners deal with wholesale market and pricing issues.”

In two years Expedia Group has tripled the number of participating chains using optimized distribution, a product that helps hotel chains “ensure that their rates make it to those customers to whom they are intended.” The company said it will release new rate-management capabilities later this year.

Expedia Group also announced that its guest experience score for hotels will be visible to travelers in the second half of 2023. Expedia Group has worked with hotel partners over the past year to create the score system, which considers feedback that comes through email, Expedia’s call center and the mobile app.

The aim is to have the score not correlate to price, Kern said.

“Our plan was not that Four Seasons would always win,” he said. “Partners who have engaged with the product … get a feedback loop of what’s wrong … and they improve their experience score. We have seen their businesses improve significantly.”

Kern cautioned that it’s still “early days” for the guest experience score and too early to tell how successful it will be because ratings are just one factor that travelers consider when booking a trip.

“How customers will absorb it, how we’ll display it to the customers, how that whole effect will work, we will learn a lot through that,” Kern said. “It may be really impactful or, sad to say, it may be like sustainability, where you think everybody wants it, but somehow it doesn’t really impact very many people’s decisions.”

But Kern said Expedia Group believes strongly in the idea that customers will respond to scores. 

“We think there’s a great opportunity and ultimately we think … a good hotel that offers a good experience for $50 or $500 should be rewarded as compared to their peers,” he said. Kern would not share specifics on how the score impacts sort order on Expedia, but he said “it has already affected hotels’ visibility in search.”

In other updates shared at the partner event, Expedia Group has extended its One Key loyalty program to flights. One Key Member Only Deals – previously available only to hotels, cruises and activity partners – can now be used by air partners, helping them increase visibility to Expedia Group’s loyalty members. One Key, Expedia Group’s first unified loyalty program, will launch on July 6 in the United States and additional markets in 2024.

*The reporter's attendance at the event was supported by Expedia Group.