As it is above, so it is below. Just as the airlines have been scooping each other up, swiftly reducing a field of 12 companies competing for American patronage to a field of only four, so have the online airfare bookers reduced themselves from a wealth of competition to a trio of giants.
Last month, unnoticed by many, Expedia purchased Travelocity. For years, passengers looking for a cheap air ticket or hotel room commonly consulted both of them, but now, as they cost costs by sharing resources, staff, and inventory, they will be increasingly unlikely to show much diversity.
Today comes word that Expedia now wants Orbitz, and it will pay $1.6 billion for it. Orbitz is a website created, seemingly in another age, by a joint venture between the airlines themselves, none of which exist in the same form today. The original intent was for the airlines to join the Web booking game while still controlling their own distribution and lowering costs, but in time, Orbitz, like all online booking sites, found that the real money was in commissions from hotel reservations.
Once regulators approve, there will be only two major players in the game: Expedia and Priceline, plus their assorted brands operating under the same umbrella. According to the Wall Street Journal, some properties report that nearly half their bookings come from those two players alone.
And this is where all these mergers matter to your pocketbook. If you search for a hotel in any major city on Expedia or Priceline, you are far, far more likely to be shown a selection of corporate brands, which are generally not the most affordable available.
The search results on those site show relatively few mom-and-pop inns, B&Bs, pensions, and the like. Try it for yourself—you'll see. Travelocity and Expedia, possessing the muscle and market influence to make special deals with hotel owners, apply their efforts to making those deals with hotel corporations first, because they cover more properties by doing so. The gems are often left off the list.
Major corporations can also afford to pay the sites to ensure their properties appear higher in search results, while the worthy little guys who have no marketing budgets get left off the list.
Now, more than ever, you must diversify your search to as many hotel booking sites as possible.
There may be increasingly ripe fruit in that tactic too, because many hotel suppliers, frustrated by the two big gorillas dominating the market now, may turn to other websites with partnerships, meaning that in addition to a much larger selection of boutique properties if you search outside Expedia and Priceline, you may also begin to find the most preferential prices.
Better yet, use an aggregator, which is a site that merely collects quotes from other sources, arranges them by price, and then delivers you to the website selling that price if you choose it. Those include Momondo.com (the booking partner for Frommers.com), Hipmunk, Mobissimo, Vayama, DoHop, Fly.com, or SkyScanner. Despite its name, HostelWorld.com also deals in small, affordable hotels.
But how do you know if your website is owned by either Expedia or Priceline? Here are their respective major holdings. Not all of them share identical inventory, but when one is purchased by their parent, there are always millions in saving due to what accountants call "synergies"—that is, sharing of the same resources:
Owned by Expedia: Travelocity, Hotwire, Trivago, Hotels.com, Venere, CarRentals.com, eLong, Wotif. (And the Orbitz brands: CheapTickets.com, eBookers, RatestoGo, HotelClub, Asia-Hotels, Trip)
Owned by Priceline: Booking.com (our hotel partner), Agoda, Kayak (an aggregator), OpenTable, RentalCars.com
Owned by TripAdvisor: Airfarewatchdog, Bookingbuddy, Oyster, Tingo, Viator
Jason Cochran (@JasCochran) is Editor of Frommers.com.
