Hyatt Hotels is threatening to terminate its distribution agreement with Expedia Inc. as soon as next month in what's likely an effort to negotiate better terms, reports eHotelier

Hyatt notified hotel owners last week that it intended to terminate its Expedia agreement at the end of July, a move that would remove Hyatt listings from, Orbitz,, Hotwire and Travelocity.

Expedia Inc. controls 70% of OTA sales in the U.S., according to research firm Phocuswright. Priceline Group controls 23%, and smaller OTAs account for the remaining 7%.

"Hyatt is in constant dialogue with Expedia and all our OTA partners around the world, but we will not get in to the details of those discussions," a Hyatt spokesperson wrote in an e-mail to Travel Weekly on Wednesday. "Our focus remains on growing the value proposition for booking directly with Hyatt so we can build strong relationships with our guests, as well as working with third-party distributors in line with our efforts to improve hotel profitability."

Expedia in a statement said, "Expedia stands by the value that we provide to our several hundred thousand hotel partners, which includes a global base of brand agnostic, incremental customers -- less than .05% of our regular customers book the same hotel brand consistently. Like all of our partners, we value our relationship with Hyatt Hotels, but we can’t comment on contract specifics."

The dispute is the latest salvo in hotel companies' efforts to reduce distribution costs and stem the tide of rising OTA sales. OTAs are hotels' most expensive distribution channel, costing them between 15% and 25% of room revenue. Expedia is thought to account for about 10% of bookings.

In an interview with Travel Weekly last month, Expedia CEO Dara Khosrowshahi said, "We’ve been reducing prices for our hotel partners in terms of commission rates. Our partners are getting more for less." Khosrowshahi made no reference to the Hyatt relationship at the time.


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