Travelocity was bought out by Expedia in November last month. This made the US based online travel companies, the four largest in the global travel industry, become three only. Expedia is also looking at a merger with Orbitz which is priced at $1.3 billion. The merger is pending a green signal from the Justice Department. Once this merger goes through the two contestants who will be part of the global online travel industry would be Priceline and Expedia.
The merger is being expected to come through by the end of the year, but many airline and hotel trade groups are challenging the deal, stating it to be anti competitive. The combined earnings of Orbitz and Expedia are approximately 8.59 billion US dollars. This is slightly above the combined earnings of Priceline’s ventures that are priced around $8.44 billion. The combined gross bookings of the merged entity would account for 74%, while Priceline would be around 21%. This is as per the estimated made by the travel researcher, Phocuswright.
The whole story is not this of this industry that has been changing in a rapid manner. The shift to new school technologies is apparent for the travel sites in recent times. The shift has come about with Airbnb and other kinds of shared accommodation facilities also being marketed on the different sites.
The transition of bookings made from desktops and laptops to mobile devices has made more and more travelers increasingly dependent on travel apps and mobile versions of the travel sites. Travelers are turning to the sites for diverse travel needs, whether searching for flights, hotels or arranging for other travel requirements instead of visiting the brick and mortar outlets for travel needs. Today, most agencies cater to group or corporate travel instead of leisure travel.
However, it is still seen that, online travel agencies or OTA makes up only sixteen percent of the gross bookings that are made in the US itself. The other vendors in the travel market are phone calls, walk ins at the supplier sites like airlines or hotels. This finding suggests that people do research, mostly online but don’t necessarily buy their tickets or make bookings online. The hotel finder application that has been rolled out but Google in 2011 is seen to be in the early stages of development. The two dominant players, Priceline and Expedia are using different strategies and goals to reach out to online customers and offer them bookings of hotels, flights, corporate travel packages and other facilities related to travel.