So Long, Travelocity?

Travelocity—long viewed as one of the “big three” online travel agencies (OTAs) along with Expedia and Orbitz—has apparently thrown in the towel as an independent operation. According to reports, the company has entered an agreement with arch-competitor Expedia: The two sites will work together and Expedia will provide some back-end technology. At least for now, the Travelocity brand will remain active, but what you get will be Expedia in drag.

The landscape of giant OTAs seems to be changing. Priceline has morphed into a full-product OTA, not confined to its original opaque “name your price” model. So far, however, Orbitz seems to remain independent, along with many smaller niche players.

But the business is consolidating, and it is now dominated by two giants: Expedia and Priceline. Expedia owns worldwide hotel agency Hotels.com and Hotwire—Priceline’s main competitor in the opaque market—along with a handful of smaller niche agencies. Priceline owns two leading hotel-booking agencies, Agoda and Booking.com, along with its stable of niche operators.

I’m not sure why these companies keep so many of their acquisitions as supposedly independent brand names. But they do. Even specialist AutoEurope maintains the Kemwel brand decades after it acquired Kemwel. Maybe, in the case of Expedia and Travelocity, they want to stay off the radar of the anti-trust folks. Regardless of reason, however, the net result is that the OTA business is a lot less competitive then it looks; be aware of that when you search for deals.

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