Expedia-Travelocity deal could be a bad trip for consumers

Source: Expedia

Travelers won't be reaping many rewards from a strategic marketing partnership announced last week between Expedia and Travelocity.

The companies say they will remain independent entities, "but what it really means for travelers is, sadly, the loss of a credible competitor," said travel analyst Henry Harteveldt of Hudson Crossing. "The Roaming Gnome [Travelocity's mascot] has thrown in the towel, hoisted the white flag and said, 'We can't keep up.' "

As announced, the deal calls for Bellevue, Wash.-based Expedia to power the platforms of Travelocity's websites in the United States and Canada and gives Travelocity, which is owned by Sabre, access to Expedia's content and customer services beginning in 2014.

Travelocity hopes to be able to strengthen its business model and offer "a top-notch booking platform and a more robust supply of travel options," Carl Sparks, the president and CEO of Travelocity Global, said in a statement.

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While the arrangement is not a merger, it will "essentially make Travelocity an affiliate of Expedia," Harteveldt said. And while Travelocity retains the right to do its own promotions and offer its own packages, specials and last-minute deals, "how different the product and the pricing will be in 2014 remains to be seen," he added. "Will it be better? I'm doubtful."

Top websites in the “travel” category for July 2013

Total U.S. Unique Visitors (000)
Travel sites 101,190
1 Expedia Inc 22,742
2 TripAdvisor Inc. 22,522
3 Priceline.com Incorporated 17,977
4 Travora Media 11,107
5 Yahoo! Travel 9,649
6 Southwest Airlines Co. 9,621
7 Orbitz Worldwide 9,313
8 Travelocity 7,205
9 Kayak.com Network 7,137
10 Fareportal Media Group 6,939
11 Marriott 6,350
12 Delta Airlines 6,267
13 Hilton Worldwide 5,860
14 United Airlines 5,770
15 USATODAY Travel 5,660
Note that this data includes U.S. desktops only. Source: comScore Media Metrix

According to comScore Media Metrix, the top three travel websites for July (ranked by unique visitors via U.S. desktops,) were Expedia, TripAdvisor and Priceline. Travelocity was No. 8.

The buddying-up of these online travel competitors won't be all that visible to business and leisure travelers searching for deals, said Douglas Quinby, an analyst with PhoCusWright.

"Because of broad agreements between suppliers, i.e., airlines and hotel companies, and the online travel agencies, you effectively have rate parity across most products, across most sites," Quinby said via email. "If anything, Travelocity's offers will get better, because they were behind the competition (Expedia, Priceline) on aggregating supply."

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Whatever happens, Harteveldt said, the good news for consumers is that, come next year, there still will be plenty of other sites, including Orbitz, Priceline and BookIt, and trip planning sites such as Pintrips, offering resources and deals for those willing to conduct comparison searches for airfare and hotel deals.

On Monday, Kayak co-founder and CEO Steve Hafner announced on CNBC that, in addition to comparing prices from Expedia, Travelocity, BookIt and other sites, Kayak will now include their review content.

"You can see the reviews right on Kayak without having to visit those third-party sites," Hafner said of Kayak, which is owned by Priceline.

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"The internet is a traveler's best friend in terms of helping them shop and compare prices and value," Harteveldt said. "And let's not forget that there are still thousands of professional travel agents who have unique access to content, especially to some of the great deals on cruises and vacation packages that never show up online."

Harriet Baskas has written seven books, including "Hidden Treasures: What Museums Can't or Won't Show You," and the Stuck at the Airport blog. Follow her on Twitter at @hbaskas.