Exclusive: Groupon Books Travel Plans Through Expedia Partnership

Groupon is partnering with Expedia to create a new discount travel service that will let people book hotel rooms and airfare at half the cost.

The announcement is being made today at the D Conference in Rancho Palos Verdes, Calif., before Groupon CEO Andrew Mason gets on stage.

“Groupon Getaways with Expedia” will work similarly to the daily emails sent by Groupon today, but instead of offers for spas, restaurants and other local services, consumers can buy vouchers for airline tickets, car rentals, cruises and other activities.

Travelers can sign up for the emails starting today at Expedia.com or Groupon.com/getaways, and the service is expected to launch in late June.

“Travel is a very popular category on our normal site, and Expedia is the biggest and best brand in travel. The partnership made a ton of sense,” Mason said.

Together, the two will leverage their combined sales forces to find travel deals across the U.S. Initially, it will offer discounts on hotels and expand to other segments, like air and cars, as well as internationally.

Scott Durchslag, Expedia’s president, said the partnership with Groupon will allow them to serve a new customer segment. Expedia customers typically know when and where they want to go on a trip. ”This is spontaneous travel. You get the best offer you can find and then you can choose when you want to go,” he said.

The partnership model is one that Groupon is using to expand into new categories.

In May, Groupon announced a joint venture with Live Nation’s Ticketmaster, which allows it to expand its group-buying model to concerts, sports, theater productions and other live events across North America. That partnership is expected to launch later this summer.

Mason said the daily deals business model stays the same with partnerships, except that the margins will be lower. The merchant still receives about half of what the consumer pays, but the other half will be split between Expedia and Groupon (specific terms were not disclosed).

Together, the two will be able to market to about 50 million people with their combined email subscriber lists in the U.S.

Groupon and Expedia are entering a crowded market full of discount travel sites, ranging from Groupon’s next-nearest competitor LivingSocial’s own branded Escapes business to other companies, such as Gilt Groupe’s Jetsetter and even Overstock.com.

The two believe the value they are offering is in the fine print and by making it as straightforward as possible. For example, once a customer purchases a voucher, they will be able to redeem it over the next year based on availability, and that they’ll do their best to avoid the dreaded blackout travel dates.

Here’s an illustrative video with Mason and Durchslag:


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