How Expedia's Acquisition of Orbitz Affects Your Travel Costs
The merger of two major online travel agencies won't lead to price hikes, but you can find better deals using other sites.
Expedia is acquiring Orbitz, leaving the Priceline Group as Expedia's sole major competitor among online travel agencies. We recently spoke with Douglas Quinby—vice-president of research at Phocuswright, a travel-industry research firm—about the acquisition, as well as his advice on getting the best travel bargains. Here is an excerpt of our conversation.
KIPLINGER: What's the impact of this acquisition on travelers?
QUINBY: The typical concern with consolidation is higher prices and less choice. But with Orbitz, you'll now have more selection. Expedia, which owns Hotels.com, Hotwire, Travelocity and other brands, has a much richer portfolio of hotels, and Expedia will probably integrate the full breadth of its content on Orbitz. Besides, Expedia doesn't have much control over pricing. None of the online travel-booking sites do.
Why is that? Pricing is determined by the competitive dynamics of hotels, airlines and other suppliers. Most of the major hotels and airlines have distribution agreements with the travel sites that keep prices consistent, so it's tough to find big differences. And the sites check each other regularly. Plus, "metasearch" engines such as Kayak, TripAdvisor and Trivago pull in options and rates from a lot of sites.
So how can travelers scout the best bargains? There are still a lot of ways to purchase travel. HotelTonight is a great mobile app if you're looking for a last-minute deal on a room. Stayful is an online travel agency for independent boutique hotels. If you want a homelike experience, try Airbnb and HomeAway. For booking activities and tours, I like GetYourGuide, Peek and Viator. With companies that use a car-sharing model, such as FlightCar and RelayRides, you can rent a privately owned vehicle and often get rates below those from big car-rental brands.
Can booking directly with suppliers save you money? Airlines and hotels are increasingly looking for ways to entice travelers to book with them. Their distribution agreements may not allow them to offer lower prices than those that appear on other sites. But if you book a room on a hotel's site, maybe you'll get free in-room Wi-Fi, say.
Can travel agents dig up good deals? If you're looking for a mass-market type of vacation—say, a quick getaway on the cheap to Miami—it's tough for travel agents to add value. If you're planning something specialized, such as a two-week culinary tour of northern Italy, that's where travel agents can shine. But be prepared to pay for it.