The online-travel soap opera – and what it means to you

Let’s just call Expedia’s $280 million acquisition of Travelocity, and the reportedly imminent sale of Orbitz, what it is: the latest chapter in an online-travel soap opera.

If you’re an industry insider, this is juicy. But for the average traveler, it’s hard to figure out whether it means anything at all. So what if Expedia bought its former rival? And does it really matter who owns Orbitz?

Elliott Advocacy is underwritten by Chubb. Chubb is the world’s largest publicly traded property and casualty insurance company, and recognized as the premier provider of insurance for successful individuals and families in the U.S. and selected international markets, offering coverage for high-value automobile, homeowners, recreational marine/aviation, valuables and umbrella liability coverage. As an underwriting company, Chubb assesses, assumes and manages risk with insight and discipline, and combines the precision of craftsmanship with decades of experience to conceive, craft and deliver the best insurance coverage and services to individuals, families and business of all size.

As a matter of fact, yes.

First, a recap of the latest episode of “As the Online Travel World Turns.” Last week, Expedia and Travelocity announced they were getting married after moving in together in 2013. Travelocity had essentially been operating as an Expedia affiliate, but it was still owned by parent company Sabre. (Told you this was complicated.) Expedia’s chief executive, Dara Khosrowshahi, said the marriage would allow his company to “continue to innovate and deliver the very best travel experiences to the widest set of travelers, all over the world.”

Meanwhile, Orbitz was reportedly mulling over a sale, although it remained unclear who would buy the online travel agency. Chris Chiames, a spokesman there, said the company doesn’t comment on “rumors and speculation about potential transactions and market activity.”

As I said, soap opera.

If you don’t follow the ins and outs of the online travel universe, don’t worry. These deals raise some important questions for the average traveler — chief among them the fate of the beloved Roaming Gnome. Will Travelocity’s mascot get sent to the recycler?

I won’t keep you in suspense. The gnome, and the Travelocity name, will survive, according to Expedia. That may be a good-news/bad-news proposition (no offense to the gnome): By keeping the Travelocity name and site, travelers might believe they’re being diligent shoppers by checking both Expedia and Travelocity when, in fact, they’re price-comparing figures from the same source.

“The average traveler probably won’t realize that when they book a deal on Travelocity now, they are actually booking through Expedia and that lots of the travel deals you see on Expedia and Travelocity will be the same or similar,” says Dennis Schaal, the news editor for Skift, a Web site that covers the online travel industry.

In fact, an important competitor has been eliminated, which means consumers have fewer choices. That could result in worse customer service, say observers such as Schaal. Remember that Travelocity used to offer a guarantee that promised to make things right during travel if something went wrong. Expedia hasn’t matched that guarantee, Schaal says, at least not yet.

But does the drama of the online travel world actually mean anything for your next trip? Maybe, says Edward Hasbrouck, an online travel industry expert and author of “The Practical Nomad: How to Travel Around the World.”

“The business reasons why the sites’ owners are choosing to merge aren’t really relevant to consumers,” he says. “What’s relevant to consumers is the reduction of competition.”

So how does an acquisition like the Expedia-Travelocity deal affect competition? Under its former owners, a site like Travelocity would have access to different inventory and, at times, better deals than its competitors. With Expedia owning it, the two are no longer competing, so you’ll need to add a few more sites to your shopping list to do your due diligence. If another large online travel company such as Priceline snatches up Orbitz, then you’ll have even fewer choices. Over time, that could make finding the right flight, hotel room or cruise more difficult.

We’re not there yet, says David Tossell, a former Travelocity manager who is now the vice president of travel and hospitality at software development company DataArt. “This is not a game-changer,” he says. His advice: Lean on the “meta” search sites that find fares from a variety of sources. Among his favorites are Kayak.com, Trivago, Google Flights and Google Hotels . Metas save you the trouble of having to bookmark dozens of travel sites and searching them one by one.

Even if Expedia gobbled up Travelocity, Orbitz and a few other big travel sites, it wouldn’t necessarily mean the reduction in competition will lead to higher prices. As a matter of fact, thanks to a little industry practice called “price parity,” hotel rates are often within a few dollars of each other — hardly something to get excited about. Online agencies are contractually forbidden from displaying lower prices than hotels do on their site. The biggest discrepancies, insiders say, are on smartphone apps like TripAdvisor’s, where hotel rates are sometimes markedly lower than they are on the hotels’ own sites. Air fares are also competitive between travel sites and the airlines’ Web sites.

For that reason, says Edward Nevraumont, a former vice president at Expedia, the deals “don’t really matter.” Nevraumont, whose specialty at Expedia was competitive analysis, says consumers would have noticed any changes a year ago, when the Expedia-Travelocity affiliate agreement kicked in, and they didn’t.

Consumers appear to have adjusted to the ups and downs of the industry. Nigel Appleby, a retired insurance broker from Vancouver, B.C., says he has already changed how he shops for travel. “I use an online travel agency for research and then I use a brick-and-mortar travel agent for a booking,” he says. Why? His travel agent can beat any price he finds online and doesn’t charge a fee.

Using a real travel agent in 2015? Who would have thought? Oh, the drama!

Who offers a better overall travel booking experience?

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48 thoughts on “The online-travel soap opera – and what it means to you

  1. I’ve always had pretty good experiences with Expedia, although I don’t use them exclusively. Last week, I had to change a prepaid yet refundable hotel reservation due to a minor change in plans. I got the money credited back to my visa card the same day it was charged. You can’t ask for any better than that.

    Nowhere is perfect but for the transactions I do, I so far can’t complain at all.

    1. Just checked out Expedia’s home page. I see hotel and cruise deals and one credit card ad. On the other hand, today in Elliott’s home page I see FIVE credit card ads. Generally speaking, the less credit card ads the better.

  2. I don’t like the question Chris!

    For me I am younger and internet savy, for someone older who does not understand the ins and outs of technology they may not understand how to search online…

    Me personally? Depending on the trip (i.e. a complicated itinerary with international travel), I would find the best deal online and book through a real person who I can call if there is an issue or sit in front of them when I get back.

      1. I’m one of those old ” does not understand modern tech. ” Too well ( ask my sons) I’m not offended at all. I can use an online travel site, don’t have to be a genius , or young!

        1. I respect your right to have an opinion. I don’t find it offensive. No need for you to apologize to those who may not agree.

        2. You probably would have gotten less negative feedback if you’d merely contrasted those who are familiar with computers and those who don’t feel as comfortable with them….
          (In any event, as one of those “older” readers, I took no offense. You made a valid point.)

    1. The question was fair and obvious. No OTA compares to having a human travel agent….the weekly articles here about people having complaints with OTA is proof. Everybody wants a great deal online and when something goes wrong they complain to Chris. A human travel agent (while not necessary for most travelers) provides the best experience, hands down.

      1. I completely understand your position, but you can get better prices online. You just have to be savy enough to understand what your getting or you will be writing to Chris!

        I agree that the TA will give you a better experience, but sometimes it’s just unnecessary.

        It all comes down to your level of comfort and online savy to understand what your getting on the Internet.

        1. I look at it like this: If a problem occurs while you are traveling and you need help, which would you choose? An OTA who may very well be an outsourced scripted droid in India? Or a well-established TA that you have been doing business with for many years? You truly get exactly what you pay for and it usually is no problem….until you have a problem.

          1. I guess as long as he is happy and he believes it is fine; then all is fine.

            There was a good article on this a while back:

            Survey: Airline Websites Outsell U.S. Online Travel Agencies

            U.S. fliers are now more likely to book tickets
            directly through an airline’s website than an online travel agency. How did airlines change consumer behavior in just a year?

            More U.S. fliers are booking flights through airline websites than
            through online travel agencies—a first for the industry, according to a survey by travel research firm PhoCusWright .

            According to the study, 36 percent of travelers said they used an
            airline website to book flights, while 33 percent said they booked
            through an online travel agency (OTA). Just a year ago, the statistics favored OTAs by roughly the same margin. The survey also found that supplier websites experienced a 5 percent bump among fliers ages 18–44, landing a third of their business.

            PhoCusWright called the shift in behavior an “epic change,”
            given consumers’ “longstanding tendency to value price, an array of choices, and convenience over brand loyalty.” The research firm lists several reasons for the shift: OTAs devoting more attention to building out their hotel offerings, airlines creating a better mobile experience to attract younger travelers, and suppliers rewarding travelers with better add-ons and promotions.

            News reports cited Frontier Airlines’ efforts as a prime example of the more aggressive marketing and promotion that airlines are engaging in to get consumers to their websites. Frontier announced that it would now be charging $25 to $100 for carry-on baggage and that rewards will count for 25 percent of miles flown, down from 50 percent. However, if fliers book through FlyFrontier.com, they will not be charged for carry-ons or see a change in how reward miles accrue.

            “It’s simple math,” said Rick Seaney, chief executive of
            Farecompare.com, in a news report. “If it costs you, the airline, $16 to sell a ticket somewhere else and $2 on your own site, you have some money to play with.”

        2. You don’t always get the best price online. Many agents can match or do better by getting added amenities when you book and you usually won’t need to worry about being walked if you arrive and find your hotel overbooked. When a hotel is overbooked guests that have paid the least are usually the first walked, which are usually the online agency reservations

      2. There are a couple of travel agents who post to this site daily; we all know who they are. Does it seem to you that they would be very sympathetic if you needed help with a travel problem?

        1. I have aided clients who felt they could do better online, and then ran into a problem. Never fails to bring them back. 🙂

    2. How can you “not like” the question? It is one of the simplest ones he has come up with. You either like to book on line or with an agent. How hard can it be?

      1. I think I explained why I don’t like the question. I prefer to book my travel directly with the airline, hotel, and rental company. Unless there is a great deal online (then I make sure I know what I am getting into). That way if there is an issue the person in front of me has to handle it and there is no middle man.

        But TAs are great too, my parents hate the Internet and the TA would be great for them. It’s a generational issued I think.

        1. You are only as savy as the information presented to you. You may be missing a better fare, better flights, but you wouldn’t know it as what you see on the internet is only what ‘they’ want you to see and book.

    3. I find most of my clients start online, then come to me for the booking, and insider hints/tips they may not have thought of, and some perks to boot! 🙂

  3. I’ve been living overseas for 3 years but plan to move back to the US in the spring. One thing I am going to miss is my local travel agent. He has generally found me better prices than I have found online. Now admittedly this is probably because I end up shopping from the US
    English language site(s) and I might do better going into the local sites,
    but they don’t always have an English option – this can impact prices for trips between 2 points outside the US. Plus his agency offers a buy now pay later option. Once I’ve picked out my tickets, he just asks me when I want my card charged (he’s done it as late as 6 weeks after I’ve purchased). In the meantime, I have a reservation and go into the airline’s website and change seats if I want to. He’s great.

  4. I always laugh (evil laugh, if you have to ask) when a merger of two big competitors is announced as a way to help consumers. I believe that the spokesman is always Phillip S. Head from the hardware fastener division, ’cause that’s what’s gonna happen to you.

  5. After being let down by an actual human travel agent (my flight was delayed 36 hours and my agent was off for the weekend; nobody else at her office was willing to help me out!) I’ve stuck with online booking for the past couple of years. Lately I have been using Google Flights to compare itineraries and prices, then booking directly with the airline rather than using a third-party site like Expedia or Orbitz. No issues (well, related to how I booked!) so far!

    1. This should NOT be happening at all. Expedia and Orbitz issue tickets on behalf of the airlines. They are APPOINTED and given “plates” by the airlines. In other words, it is as if the tickets they issue are from the airlines themselves.
      Maybe there is a nefarious activity that the airlines are conducting to give OTA customers a hard time so they will learn a lesson and buy direct from the airline.
      This is disgusting since the airlines have literally all your money, it is their ticket (just look at the eticket number), it is their flight and they can fix it (if the want to).
      OTAs make very little money on airline tickets. They make a killing on hotel rooms.

      I am wondering why Chris Elliott does not simply investigate this and ask the airlines why they give OTA customers such a hard time.

    2. I just booked several tickets in my GDS. I decided to check the airline’s website to see if what I found was matching what they had. I found that the flights I booked for the dates I booked, didn’t even show up on the airline’s website. This is the second time I have encountered this. Also, what I also found the other day when I was on the airline’s website, is that it didn’t give me all the options of fares, even though many were available.
      Do note that any OTA or carriers website is not regulated and its’ required to show you all that they have for sale. All they have to show you is what they want you to see. Keep that in mind.

  6. The true answer to today’s poll question is “it depends.” Because there are so many variables. If I’m planning a simple, straightforward Point A to Point B trip, then I might have a better experience going online, but If I’m planning certain types of travel, like a trip going to lots of different places or flights with a number of layovers and connections, I’d want to use a travel agent, period, just to have someone in my corner in trying to deal with all the different companies and agents involved.

    1. You know, I have several large families who love to travel together, but occasionally ONLY need airline tickets, and I can offer a flat fee for doing all their tickets, or in some cases, may tell them which flights are the best options, and let them book directly with the airline. It all comes down to taking care of the client with HIS best interests in mind – I’d rather do a quick price quote for them, and know they are happy, then alienate them by insisting on a fee prior to ticketing. 🙂

  7. I’ve never used a travel agent. I’ve always booked direct or sometimes will use one of the travel sites, but I rarely find an advantage to doing so honestly. It’s just simpler to deal with the company directly and I’ve never really had an issue.

    1. You deal with an agent BECAUSE of the unforeseen circumstances. I have gotten nonrefundable hotels refunded (airline tickets as well), have gotten more perks for a client, as well as lower fares, and they know they can count on me to be there when needed. Have a foot and a half of snow outside the door yesterday morning, but STILL managed to take care of over a dozen clients’ very detailed itineraries (do a lot of multi destination Europe, so lots of things in their bookings).

  8. Re: His travel agent can beat any price he finds online and doesn’t charge a fee.
    Ha, really?
    I’ve always thought you go online to find the cheapest fare; you use a travel agent for more service; and you go directly and buy from the airline for the least complications.

  9. I didn’t vote. Many times I find the best hotel price by checking online travel agencies, choosing the hotel I want to book and then going to the hotel’s site and booking there. Why? Two reasons. Online travel agencies won’t allow you to access discounts for AARP and AAA memberships (I belong to both). Also, online agencies are likely to demand payment in advance and have policies in place that require a longer notice to cancel a reservation. Hotel sites, when the AARP or AAA discount is used, will many times allow cancellation before 6:00 pm on the day of arrival. This comes in handy if a flight is cancelled, etc.

    1. Can also book those thru our GDS – and we can often get even LOWER prices than AARP or AAA because of our consortiums. Same rules apply as to payment and cancellations as well. And when a client HAS forgotten to cancel something, I can usually get the hotel to waive the penalty, or our agency will cover the charge for good clients as well.

  10. I can’t remember the last time I booked with Expedia or Travelocity. Now I use Kayak and then book directly with the airline. When easysabre went away online agencies lost their usefulness.

    1. easysabre was a joke!

      Kayak doesn’t give you all your options as the carrier’s website site doesn’t have them either.

      1. For me easySabre was great, it allowed me to see exactly what fare classes were available on each flight, for free. If you had access to something that could do that because of some other service, then that’s great but it worked really for me and was not a joke by any means. Re Kayak, I don’t know exactly what you are saying.

        1. Briefly, during an agency change, I had to use easySabre. For novices/beginners it might be ok, but it drove me nuts. One benefit I can see that you mention is you learned about the way flights are actually booked and priced.
          Kayak is a search engine and only as good as the site they are quoting. OTA’s and carrier’s sites, do not have all flights and fares that you can book.

          1. It was better than Travelocity. I’d hardly describe a system that requires memorizing commands and airport codes as being for beginners, although I suspect that you are an expert in the field and for you it might have been too simple. For the average user like me it was very powerful.

  11. For me this is a question of comparing apples and oranges. If one is interested
    in price alone, and knows (or thinks one knows) exactly what arrangements are
    desired, then the Internet is for them.

    If one lacks the time or the initiative, or the services of “experience” (maybe?) or wants someone else to coordinate multiple parts of a trip (i.e. hotels, air and land schedules, and event tickets) then a travel agent is for them.

  12. Yes as long as you are aware that all options are being shown. I was surprised to find what I had just booked in the GDS for my own travel wasn’t obtainable on the carrier’s website. The flights didn’t show.

    1. While it is true we can make different flight combinations using our GDS, the truth is, unless you are looking at some odd route, the flight combinations found by ITA QPX for google, hipmunk, orbitz, etc., and found by Amadeus Meta Pricer for Kayak, etc.; are sufficient for the DIY market. In fact, google flights and kayak are so good, I don’t bother to start a search with my GDS anymore. It is a lot faster and easier to simply launch google flights and kayak and hipmunk altogether with a script; look at the result, and use them to make my own itinerary in GDS. Most often, the prices are even cheaper than published fare especially when Orbitz decides to discount published fares. Thank you google flights, kayak and hipmunk. You’ve made this travel agent’s role more irrelevant in some ways but more relevant in other ways. Smart travelers know they will use a travel agent for QUALITATIVE factors the search engines do not know about. Some people care about quality.

      1. I disagree. My flights couldn’t be found online, yet they exist. Same for a client’s flight. Kayak and the carrier never showed the flight out of SFO that I booked in the GDS and it saved them $2000….$1000 per ticket. That is why I will NEVER give up the GDS.

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