Just weeks after purchasing Travelocity, Expedia is buying another online booking rival, Orbitz, for $1.6 billion.
Expedia bought Travelocity in January for $280 million, USA Today reported. The Orbitz merger means Expedia now controls its namesake site, Travelocity, Trivago, Hotwire.com, CheapTickets.com, Hotels.com and Orbitz.com.
Expedia’s acquisitions have succeeded in “cementing its place as the No. 1 digital travel provider,” USA Today said.
According to The Wall Street Journal, the Orbitz acquisition gives Expedia a market share of more than 6 percent of the travel retail area. Priceline, which includes Booking.com and Kayak, has a 5 percent market share.
“It’s now Expedia vs. Priceline, head to head,” Robert Cole, a travel industry analyst and consultant, told USA Today.
Typically, consolidation, which cuts competition, isn’t good news for consumers. Fortunately, that doesn’t appear to be the case with Expedia’s mergers. According to Money, the consolidation of travel search engines should have little to no impact on travelers’ bottom line.
“There are so many ways now to buy travel online, Priceline, AirBnB, Google Flights, buying direct from vendors like AA.com, Hilton.com, and many more to come, that there will still be options and competition, and little consumer effect,” George Hobica, founder of the low-price flight specialist AirfareWatchdog said in an email to Money.
Though travelers aren’t likely to notice any changes in search engine results or travel pricing as a result of the merger, the hotel and lodging industry is keeping a close eye on the merger. About 19 percent of hotel bookings are made through online travel agencies such as Expedia, the WSJ said. Those sites are paid a commission by the hotels.
Expedia said it doesn’t plan to use the Orbitz merger to raise hotel commissions, the WSJ reports. Still, hotels are wary.
“This most recent merger raises questions, and appears to be counter to the goal of creating more consumer choice,” the American Hotel & Lodging Association said. “We will be watching this development closely as the process moves forward.”
What do you think of Expedia’s planned acquisition of Orbitz? Do you have a favorite online travel agency? Share your comments below or on our Facebook page.
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