Thursday, August 31, 2006

Why Expedia, Orbitz, and Travelocity Will Become Extinct

There is a new bread of travel sites cropping up that pose a serious threat to the current leaders in the online travel space. Sites like Sidestep and Kayak are significantly different than the "old school" travel sites like Expedia and Travelocity in that you do your price search through their site, but book directly with the airline or hotel.

With more and more airlines and hotels guaranteeing the lowest rates when booking directly, consumers will gradually become savvy enough to realize that there is little reason to book through an aggregator like Expedia. According to a recent report by HitWise, the market share of visits to travel meta-search engines Kayak and Yahoo! FareChase increased by over 70% from May 2005 to May 2006.

Further diminishing the value of the aggregators, many airlines such as Continental and hotels including Hilton, Starwood, and Marriott go beyond just the best rate guarantees and offer perks such as upgrades or bonus loyalty points for booking directly. If you read through TripAdvisor, you'll also find countless tales of people who booked through sites like Expedia only to find they had problems once they arrived because they did not book direct.

There is also a pretty revolutionary new site still in beta called that tracks average airfare prices between major cities and advises you on the best time to purchase based on recent trends. Sites like this give the consumer so much more buying power than they have ever had before.

The one area that companies like Orbitz and Expedia can fight back is in packages. A recent search for airfare + hotel for an October trip to San Francisco if booked directly through Marriott and United Airlines would have cost me about $1250, while a package booked through Expedia would have only cost $775, a savings of 38%. I tested several other travel scenarios and found nearly all of the packages to be considerably cheaper than buying direct.

The late 90's saw the virtual extinction of offline travel agents when people discovered online travel booking, and I think it will only take 3-5 more years before sites like Orbitz, Expedia, and Travelocity also border on extinction.


Anonymous said...

Another reason for EXPEDIA: EXPEDIA is listed in the top ripoff link at the bad business bureau ( ) and has two "dedicated" websites due to poor customer support and lies: and

Kind regards

Anonymous said...

I just wanted to also add that has a vastly superior interface. So not only to you get to not pay extra fees, but you find a cheaper flight faster. It is pretty rediculous

Jim said...

This is an observation, and not meant to be a slam on this article, which is written very well.

It appears that the travel aggregators are doing quite well in 2009.

Travel Ideas said...

I love the slanted Kayak/Sidestep promotion here. Both great companies to be certain, although flawed conclusions. For starters, Expedia is not an aggregator. Nor Travelocity, nor Orbitz. Get A occasionally does offer aggregate deals listed as "Wholesale Rates." What these 4 travel giants do is this:They simply re-list all the hotels,airlines and car rentals by way of how "you" want the results sorted,all done within seconds i.e.lowest rates first, by star rating, etc.

An aggregator will go and buy a block of hotel rooms up, or book an entire portion of a flight at deep discounts and pass them on to you [or not]. None of the companies in discussion are true aggregators. Sidestep and Kayak are fabulous, just wondering why the slander on Expedia? They each fulfill a different function all together.

As stated above,the likes of Travelocity and Expedia check with all the airlines and hotels for their results - the best price for each individual travel product. After Expedia , Orbitz or Travelocity has done this,companies like Sidestep will take it even a step further by way of cross comparing all these travel company giants with each other. we truly have the "best rates!" The only drawback I see is a slight time delay in search results. But hey, isn't saving 20 bucks, or several hundred dollars for that matter, worth an extra 15 seconds of your time?

My gripe with this post is it is a little like shooting yourself in the foot when you root for Sidestep and slander Expedia all in the same breath. Expedia is one of Sidestep and Kayak's greatest assets. Be nice to your neighbors;) -- Cheers, Roman T.

Chris Kramer said...

Thanks Roman, amazingly this post written more than 5 years ago still gets comments. Maybe time I wrote an updated perspective.