It is slightly more than a year since final Justice Department approval of the merger between American Airlines and U.S. Airways, but most of the travel industry is still dazed and dizzy from the shock. In a country that always prided itself on its dislike of monopolies, we have permitted the aviation industry to reduce itself, in effect, to exactly four carriers accounting for more than 80% of all domestic aviation. In numerous major cities of the U.S., there is no longer any real competition between airlines. The public pays what a single financial officer decrees.
How did we allow that situation to come to pass? What happened to our anti-trust laws? And now that aviation has become the plaything of a number of monopolies, will the same situation emerge in the hotel industry, in the online travel agency industry, and in numerous other segments of our travel industry?
It appears that the answer to that question is Yes. Just within the past several days, the giant Marriott Hotel Chain merged with the giant Starwood Chain (owning Sheraton Hotels, among others), and the result—if anti-trust officials remain asleep—is one immense hotel behemoth accounting for a fearful percentage of all U.S. hotel rooms. Already, the people who place the hotel bookings of large conventions and other groups have pointed out that in the past, they were able to set Marriott against Starwood in requesting rates, and the resulting competition between the two resulted in drastically reduced prices. This will no longer happen, and Marriott/Starwood will simply negotiate with hotel seekers on a "take it or leave it" basis.
Moreover, every major commentator has already predicted that other hotel mergers will soon follow. The tendency towards monopoly, once permitted, appears to accelerate.
(Photo by John Morgan/Flickr)
What has happened to airlines and hotels has also already occurred with respect to the companies offering digital assistance to persons planning trips. The giant Expedia corporation has acquired its two former rivals, the giant Orbitz and the giant Travelocity. Expedia has also acquired many of its former smaller competitors, and Expedia—as only one example—now also owns Homeaway, the largest source of vacation apartments and homes. In the meantime, Expedia's one remaining rival, Priceline, has acquired the giant hotel reservations service, Booking.com. Only the lack of space keeps me from listing the countless other formerly-independent companies performing travel functions, which are now subordinates of Expedia and Priceline.
The growing size of a small number of travel corporations is a frightful phenomenon to contemplate. In his recently-published book "Saving Capitalism, For the Many Not the Few", economist Robert Reich has pointed out that the growing tendency to monopolies in America is one of the many factors that has caused 90% of our population to suffer stagnating and insufficient wages and economic inequality, as compared with the staggering increase in wealth and power enjoyed by the top 1%.
Monopolies in the travel industry are different from those in other industries only because their growth is so much more rapid. It would take many pages of newspaper analysis simply to list the dynamic, thriving, but smaller travel companies that have recently been scooped up by the two major digital firms. We, as American citizens, must oppose this trend by electing representatives, and urging other representatives, to slow or halt this dangerous trend. Anti-trust in travel should be our slogan, and also our firm policy.
