Feb132015

Expedia buys Orbitz. Big box OTAs mirror big hotel chains in acquisitions and mergers

Expedia buying Orbitz for $1.6 billion is the online travel agency mirror of the acquisition and merger phenomenon in major hotel chains of recent years. IHG bought Kimpton Hotels in 2014. Marriott International is the hotel industry equivalent to Expedia. Marriott recently bought Delta Hotels in Canada. In the past few years Marriott has acquired Gaylord Hotels & Resorts in the US, landed Atlantis Paradise Island as an Autograph Collection member, acquired AC Hotels in Spain and Protea Hotels in Africa.

Big money among the big players has consolidated the online travel agency to the point that Expedia and Priceline are the primary legacy names controlling over 10% of the global retail travel market.

Most consumers probably have no idea that dozens of major OTA sites are owned by two parent companies in Expedia or Priceline. People like websites for different reasons. I used Travelocity.com for years when it offered a monthly rate calendar as an easy way to locate potential best rate guarantee claims. I checked Travelocity to find good dates for discretionary travel when I could maximize a hotel loyalty promotion matched to low hotel rate dates. Travelocity also use to offer a low fare finder from any airport. Orbitz was one of my favorite sites for finding low airfare in recent years with their grid of calendar dates and airfare rates. Google Flights is now my preferred method for finding low airfare dates.

For the average consumer booking travel, the consolidation of online travel agencies is not an issue. Until I started attending hotel industry conferences in the past decade, I was unaware that it is common for hotel owners to have several properties in the same area flying different brand flags. While you may be loyal to IHG, the owner of the Holiday Inn Express where you stay may be the same company who owns the Hampton Inn across the street. I recently encountered this in Salt Lake City where I was staying at Marriott Courtyard Downtown and learned the new Hyatt House a few blocks away is owned by the same company who is building a new Marriott Courtyard adjacent to Hyatt House.

Here are some articles from Skift.com with background into Expedia and Priceline as parent companies for many of the major online travel companies.

Analysis: It’s Expedia Against Everyone Else After Orbitz and Travelocity Deals (Feb 12, 2015)

Expedia Vs. Priceline: Adding Up the Acquisitions (Feb 12, 2015)

The acquisitions article on Skift.com has tables showing all the OTA and other travel related sites scooped up by Expedia, Priceline and TripAdvisor in recent years.

Last month I wrote an article citing Skift and EyeforTravel with data about Priceline being the largest market cap publicly traded travel company in the world. Its booking.com site is the largest OTA seller of hotel rooms at 4 million rooms daily. EyeforTravel suggests industry analysts think Amazon.com can move into the online hotel booking space by charging hotels lower commissions, say 15 to 20% by Amazon compared to 25% to 30% by Expedia.com and Booking.com in a move to take market share from Expedia and Priceline.

Will Amazon challenge Expedia and Priceline for hotel bookings? (Jan 20, 2015)

About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined BoardingArea.com in 2008.

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