LOS ANGELES, Jan 29 (Reuters) - Expedia and other travel services owned by USA Interactive (nasdaq: USAI - news - people) will probably offer incentives to court frequent travelers, Chairman and Chief Executive Barry Diller said on Wednesday.
"Inevitably, given the kinds of properties that we have, services that we have, incentive programs of various types are something we probably will do," Diller told a hotel industry conference when asked whether online travel service Expedia would offer a frequent stay or points program.
USAI has controlling interests or owns outright Expedia, hotels.com, dating service Match.com, and a host of other Web sites.
"We think probably we will do it inside our kind of walled garden of services," Diller said. "We think that is not a bad breeding ground for that type of activity, and we think it is inevitable, too," Diller said.
Hotel industry executives are nervous that Expedia and rival Web sites will start to compete with lodging companies for brand recognition or even start buying hotels.
The travel Web sites generally cooperate with hotels, selling rooms from hotel inventory. The Web sites pocket the difference between the rate they charge consumers and the discounted rates at which hotels offer them the rooms.
Diller said his companies would not become hotel owners or overshadow the hotels. "It is impossible. They do different things," he said.
Nevertheless, companies like Hilton are looking for ways to steer guests to proprietary Web sites.
Hilton said last week it may quit giving loyalty program credit for stays booked on third-party Web sites in a bid to stave off competition.
Forbes
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