Last month on Frommer’s, I detailed how the U.S. airline industry has never been more concentrated thanks to mergers and acquisitions, and I expressed hope that the U.S. Department of Justice (DOJ) would prevail in its lawsuit to prevent JetBlue from acquiring Spirit Airlines.
Well, last week, that’s exactly what happened, as the federal court in Boston decreed the marriage between the two carriers had been called off. My non-partisan and non-profit organization, American Economic Liberties Project, expressed great pleasure.
There was quite a bit of media coverage of the JetBlue–Spirit saga, so even infrequent travelers were made aware of this story. But for whatever reason, mergers in other areas of the travel industry, including booking sites, hotels, cruise lines, and car rental firms never seem to generate headlines.
Even so, the results of consolidation are always the same: less competition and, ultimately, higher prices. And sometimes deteriorating service as well.
Head-to-head competition in every sector of the travel industry has been rapidly shrinking over the last two decades, but the real news is that most consumers aren’t aware of all these mergers and acquisitions.
This is how small the travel industry has become in recent years:
So you visit Expedia. And then Orbitz. And Travelocity. Hotwire. CheapTickets. Trivago. But what you may not realize is that—along with Hotels.com, Vrbo, and several other sites—those are all sister companies under the Expedia Group umbrella.
Meanwhile, you’ve probably never heard of Booking Holdings. But undoubtedly you do know some of the many brands it owns: Priceline, Kayak, Cheapflights, Booking.com, Momondo, etc.
Tripadvisor? It maintains more than a dozen travel sites, including Cruise Critic and SeatGuru.
And SmarterTravel also owns Airfarewatchdog, FamilyVacationCritic, and Oyster.com.
Dozens of brands—not rivals, but all owned by four corporations.
Are there differences among the sister companies? There can be. But there also are commonalities in how they search for prices and obtain exclusive deals.
Therefore, it can pay to know who owns what, because if you’re looking at other sites and thinking they’re rivals, then you need to know which ones truly are competitors.
The next time you’re in a major American airport, you’ll unquestionably pass signage and rental counters for household names Alamo, Avis, Budget, Dollar, Enterprise, Hertz, National, and Thrifty. That sounds like a robust and competitive market, no?
You’ll no doubt recognize the logos and colors associated with most of these brands at airports nationwide. But if you’re hoping these choices provide the advantages of competition, unfortunately it’s only a three-way race.
Most veteran cruise fans have loyalties to specific brands. For example, Carnival Cruise Line might appeal to a certain demographic, but its parent, Carnival Corporation, also owns Princess, Holland America, Costa, Seabourn, P&O, Cunard, and others.
It’s a common pattern. Norwegian Holdings also owns Regent Seven Seas and Oceania. Royal Caribbean Group’s portfolio includes Celebrity and Silversea, as well as part ownership of TUI and Hapag-Lloyd.
And while many travelers may not know GTHKF, they probably know its brands: Crystal, Dream, and Star Cruises.
But at least in America we have lots and lots of hotel chains, right? Dozens of familiar names ranging from budget to luxury, from sea to shining sea.
Not so. Unfortunately, if you eliminated the top six parent companies, there wouldn’t be a hotel industry left in the United States.
Choice owns Ascend, Clarion, Comfort, EconoLodge, Quality Inn, Radisson, Rodeway Inn, etc.
Hilton owns owns Conrad, DoubleTree, Embassy Suites, Hampton, Homewood, Waldorf Astoria, etc.
InterContinental owns Candlewood Suites, Crowne Plaza, Holiday Inn, Kimpton, Regent, etc.
Marriott (Bonvoy) owns Courtyard, Fairfield Inn, Four Points, Le Méridien, Renaissance, Residence Inn, Ritz-Carlton, Sheraton, SpringHill Suites, St. Regis, W, Westin, etc.
Wyndham owns Baymont, Days Inn, Hawthorn Suites, Howard Johnson, La Quinta, Microtel, Ramada, Super 8, Travelodge, Wingate, etc.
Hyatt owns 23 separate brands.
What Can You Do?
* If you’re uncertain about the company you’re interacting with, visit the website’s About section to determine who owns that brand. Better awareness of the market can only help your travel decisions.
• Join the free loyalty programs. For some, all this consolidation has increased the value of loyalty program membership.
Consider Choice Privileges, in which you can accumulate points on properties ranging from an EconoLodge to a Park Plaza.
That trick works with other hotel companies, too. Many travelers don’t realize points from one stay may be usable at a stay at another brand.
• Use corporate connections when you encounter problems on the road.
When my son was young, I booked a rental car through Dollar and reserved a child seat, but upon arrival I was told that despite my reservation, they were out of car seats. But I asked the agent if they could secure a seat through Dollar’s partner Thrifty, and it was delivered within minutes. Try this method yourself the next time a rental agency can't deliver what it promised you.
• Similar strategies can help the next time a hotel says there are no rooms available. There may be space at nearby sister hotels.
If you’re concerned about rampant corporate consolidation, the good news is we’re living in a time of the most pro-consumer DOJ in generations.
Feel free to express your opinions about travel consolidation by emailing the department’s Antitrust Division at Antitrust.ATR@usdoj.gov. You can also contact the Federal Trade Commission via its website at reportfraud.ftc.gov/#/.
William J. McGee is the Senior Fellow for Aviation & Travel at American Economic Liberties Project. An FAA-licensed aircraft dispatcher, he spent seven years in airline flight operations management and was Editor-in-Chief of Consumer Reports Travel Letter. He is the author of Attention All Passengers and teaches at Vaughn College of Aeronautics. There is more at www.economicliberties.us/william-mcgee/.