Expedia pits hotels against one another for rankings in game-changing Accelerator marketplace

Expedia is making a dramatic pivot away from the method it has traditionally determined hotel rankings in search results on its site, announcing it will now allow hotels to bid for placement against one another to determine which properties will appear on the first page of users' screens.

The company is calling the new approach "Accelerator", and while it quietly launched in limited markets in recent weeks, there has yet to be a full-scale deployment of the program or an official announcement. Expedia Inc. CFO Mark Okerstrom spoke with Skift about the changes:

“We are also offering the opportunity for hotels to augment that quality nature of their listing with incremental economics to help give them a little bit of a boost. It is a program we call Accelerator. And so we just transitioned the model to one of much more of a marketplace. So I think we will leave it to the various hotel companies to dictate for themselves how they use our marketplace and we would encourage them to do it in a way that maximizes what’s best for them.”

Okerstrom says that while the Accelerator updates are now just being tested out in select markets, the program has been a year in the making. Those concerned that hotels with largely negative reviews will be able to hide their true customer dissatisfaction by paying for placement needn't worry just yet. Customer feedback determined via Net Promoter Scores will still go a long way when it comes to influencing the position a hotel sits at in Expedia's search results.

Expedia President and CEO Dara Khosrowshahi spoke candidly about the new program on a recent earnings call, and said the company wouldn't be "aggressively" pushing the new marketplace.

"In general, Accelerator is a move in the direction of having much more of a marketplace model for our margins so that hoteliers can bid up when they need volume, they can go to base bid when they don't need volume, and also along with bidding, you get the quality of content to the hotel, how these hotels treat our customers, quality of service, etc., and user reviews all mixing into a combination of the best hotel for the best customer and also economics that hoteliers want to bid at and obviously hopefully economics that work out for us.

So we are very early on this journey. The signs that we are seeing with Accelerator so far are encouraging."

If — or more likely when — the Accelerator marketplace is adopted in all of Expedia's markets, it could have lasting repercussions across the entire travel industry. It isn't difficult to foresee a scenario in which airlines and rental car agencies are offered the opportunity to outbid one another in competing markets. And surely Priceline and TripAdvisor will want to get in on a little marketplace action of their own if brands show a willingness to pay to play.