Consolidation in Online Booking Sites: What Selling Orbitz and Travelocity Will Mean to You

Expedia, which was already operating Travelocity with its own search technology, is now acquiring its Sabre-owned smaller rival.

Since Travelocity had long since given up investing in its search and booking platform, and I found it virtually unusable as a standalone (though I still tried to use it, as it would offer be 2 Ultimate Rewards points for bookings made through the Chase shopping portal), the consolidation doesn’t mean much for competitive pricing in the industry. About the only thing it changes is having one fewer marketing site that offered its own set of coupons and incentives like shopping portal payouts. That matters, but only at the margin.

More significant perhaps is that Orbitz, once started by a consortium of airlines as a competitor to online booking sites but which eventually spun off to become their competitor, is looking to sell itself. This is meaningful because:

  • Orbitz generally has the best airfare search technology for combining fares across different airlines.
  • That’s useful for fuel dumps (though not as useful as Expedia’s various country sites that allow you to issue tickets in the country of your choice).
  • Orbitz is also more advanced than Expedia in pushing hotel choices that it thinks best match consumer preferences, rather than those with the best payout to the booking engine (or that are privileged for other internal reasons).
  • More players investing in search technology push out the progress in delivering best results for consumers, so consolidation there is on net undesirable.

That said there are still new entrants in the search space, and Google’s increasing presence should more than compensate if we lose Orbitz.

And a stronger Expedia plus Google will both represent competitors to Priceline, which is really Kayak and Booking.com.

We’re still in the early stages of online booking technology, and the future is in advances that allow mass customization and tailored travel recommendations. So we shouldn’t expect that the biggest entity now will stay the biggest — the future of online booking will be won by the companies that can best guide customers through the complex world of travel to the myriad choices that work best for them.

That’s not just ‘which flight is cheapest’ or ‘which hotel gives me the features I want’ but which connection is best given weather, which total trip cost is lowest or even provides the best overall value, and what site best knows and understands evene unstated preferences of a given consumer.


About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Are there any frequent travelers who actually find that the traditional online booking sites “add value”?

    I find the meta-search sites (like kayak) to add value, but I only book through an online site when it’s cheaper than the alternatives — basically when I can take advantage of them when they offer a discount code or cashback offer that can be manipulated to my advantage. I presume they break-even on these transaction, at best.

    I find this somewhat surprising because while airline commission are very low, hotel commissions can be very high. So there’s money these agencies could deploy to foster my loyalty. None ever have. If they give me their commission, I book with them. If they don’t, I book elsewhere.

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