Groupon Inc (NASDAQ:GRPN) and Expedia Inc (NASDAQ:EXPE) are retracting from their partnership that lasted for three-years and primarily focused on selling heavily discounted travel deals, according to a report from Geek Wire. The news was confirmed by the Groupon spokesman, who said that both the companies are disengaging and will no longer offer co-branded deals.
Expedia, Groupon don’t need each other
The partnership, known as “Groupon Getaways with Expedia” came into existence on the same day when Groupon issued its IPO. At that time, Expedia could not have imagined of a better partner to flaunt its popular business model. Currently, the situation is bitter for Groupon, and the company has lost its glam and glitter unlike Expedia, which is still a big shot in the travelling industry.
In his first-quarter letter to investors of Greenlight Capital, David Einhorn lashed out at regulators. He claimed that the market is "fractured and possibly in the process of breaking completely." Q1 2021 hedge fund letters, conferences and more Einhorn claimed that many market participants and policymakers have effectively succeeded in "defunding the regulators." He pointed Read More
The daily deals company stated that the public face of the partnership has ended, but both the companies are committed to working together as Expedia is an important supply partner for the fast growing gateway business of the Groupon.
“Expedia remains an important supply partner for our fast-growing Getaways business. However, we are no longer co-branding,” said Groupon’s Nicholas Halliwell, in a statement.
Expedia hurled an email to the customers, yesterday, reading “Introducing Daily Deals” in which customers were offered to save 50% on deals that would end at midnight. There was no mention of Groupon in the entire email. Groupon has, also, dropped any mention of Expedia from its Gateway site.
What made them part ways?
Halliwell said that the company has been successful independently by promoting travel deals to more than 200 million subscribers and sourcing travel flash deals inventory specifically through the Groupon Gateway sales deal. The executive added that the search rate for hotels on Groupon is one of the highest.
The obvious reason for this partnership to end seems to be that both the companies no longer need each other. Generally, around 50% of the sales deal was pocketed by Groupon, however, in this particular partnership, the revenues were shared equally with Expedia. And each company believes that it was successful almost entirely on its own.
So, to put it in simple terms, by ending the partnership each would get a larger share in revenue or could focus on further strengthening their respective strategies.
Earlier in January, Groupon collaborated with Expedia Affiliate Network business unit to source the Groupon Getaway’s marketplace through which rooms at 20,000 hotels can be booked all over the world.