New Expedia tech extends debate on attribute-based selling

Travelers booking stays through Expedia Group can now select from à la carte options such as breakfast, parking and refundable reservations through the company’s attribute-based shopping (ABS) technology. Expedia Group claims it is the first online travel agency to unbundle hotels’ rate plans, making it easier for travelers to compare the cost of the room along with extras they can add to a reservation – and potentially generating more revenue for the hotels.

For now, Expedia Group’s system is based on a broad definition of attributes that includes rate-plan features such as cancellation policies and ancillary products such as spa services. But it does not enable customization of room-level attributes such as location, floor or view – a requirement of true ABS, said Doug Rice, managing director at Hospitality Technology Network. These types of characteristics can’t be unbundled from their specific room, are guaranteed at time of booking and are, therefore, much more difficult to enable.

“There’s a lot of companies out there that are saying they’re doing attribute-based selling because that’s a popular marketing term,” Rice said. “But if you really look at what is an attribute, that’s not what they’re selling. They’re selling things that you can add on to a room.”

Expedia Group said it has been working to onboard additional “high-value” room content that travelers can book, “but we are not enabling customization of room-level attributes with ABS technology at this time. We’re planning to test reintroducing this later in the year.”

ABS – by the company’s broader definition – has been happening at Expedia Group to some extent since 2019. The company said it took time to research and build its ABS tech before it launched globally in its current form in the first quarter of 2021.

Expedia Group’s hotel partners must optimize their rate plans to take advantage of Expedia Group’s ABS opportunity – for example by consistently naming and pricing the available add-ons and by ensuring each room type has a rate plan for each possible attribute combination. For those that do, Expedia Group said in 2022 it found this type of shopping experience, combined with machine learning to recommend offers that meet the users’ preferences, drove a 4.1% shift to more premium rooms and rates.

“Early indications have also shown increases in conversion when the ABS layout is shown to the traveler, and we’ve only just begun to take advantage of this new capability,” said Hari Nair, senior vice president of lodging partners at Expedia Group. “As choice and transparency have become more possible in other elements of consumers’ lives, they expect the same experience when it comes to booking travel – and with ABS, we are one step closer.”

Prior to ABS, Nair said lodging rate plans were packaged in a “complex and often overwhelming format” that made it difficult for travelers to compare offerings and prices — leading them to book the cheapest rate plan more than half of the time.

Startups strive to move needle on ABS

While upselling has become commonplace in hospitality, sales based on room-level attributes are still very early in their evolution. Several products support attribute selling at least to a degree, and some newer core platforms for reservations and property management can support attribute selling, according to Rice.

One large brand – IHG Hotels & Resorts – has rolled out a limited implementation of ABS in partnership with Amadeus.

“Aside from IHG, some large hotel brands reportedly have ABS on their longer-term roadmaps, although I believe they are likely years away,” he said.

Most online travel agencies can only support a selection based on property attributes, leaving it up to the individual hotel to upsell customers on their best rooms or customize their stay by signing up for extra services.

“To really do attributes,” he said, “[OTAs] would have to have inventory for every room and know what attributes are part of every room, and there’s not an infrastructure to support that today.”

Rice pointed to startups such as Expect Me, GauVendi – a PhocusWire Hot 25 Travel Startup for 2023 - and Roomdex as making progress on room-level attribute-based shopping.

Roomdex says it has tested its ABS solution at five hotels in the U.S. and Europe over two months and found a year-over-year increase of 14% in upselling revenue. 

“It has demonstrated that these benefits can be achieved through the existing room category-centric hotel tech stack, without the need for an ABS ecosystem that transforms all PMS, RMS, CRS, booking engine and OTAs,” said Jos Schaap, CEO and co-founder of Roomdex.

And Rice said RationalAI, a new startup co-founded by CEO Pierre Boettner, is one to watch.

RationalAI’s tech comes in a “simple package” that integrates directly into existing hotel systems, Boettner said. The reason ABS hasn’t worked before now is because “every time brands would try a solution, it would immediately cause chaos at the hotel because none of the systems are made to receive these kinds of bookings.”

“We are bringing attribute-based shopping straight to the booking engine without the need to change out all these costly systems,” Boettner said.

The result is a booking process that’s more transparent and efficient, he said. When customers know the attributes they’re paying for, hotels should see at least 2-4% more in revenues.

As Boettner sees it, with happy customers and rising revenues, it doesn’t matter how hotels and booking agents define attributes.

“At the end of the day, it’s the community that determines what words mean,” he said. “I think the term ABS is already used for different things. For now we stick to it but will see how it evolves in its meaning.”