Are Expedia, Orbitz and Travelocity Becoming Extinct?
With Priceline’s recent purchase of price comparison engine, Kayak, for $1.8 billion in a cash-and-stock deal, the question, will Orbitz, Expedia, Priceline and Travelocity be around in five years, could either be exceptionally relevant or exceptionally irrelevant.
But it’s a fascinating question, and Hotelmarketing.com was bold enough to ask it.
Their disclaimer was that the question was probably “nonsensical,” but their point is that Online Travel Agents (OTA), like the giants mentioned above, are under attack by airlines, hotels and car rental companies who simply don’t want to share their booking revenue. The airlines would much rather that you, the consumer, book from their web sites, which enables them to keep all of your money and not have to split it with the OTA’s.
While it’s unlikely Expedia and company will soon, as Hotelmarketing asks, “become the web equivalent of buggy-whip manufacturers,” (or is that “horses and bayonets”?), still, the action by the International Air Transport Association or IATA, is ominous.
The association works with more than 240 airlines around the world, and at a recent meeting in Abu Dhabi, it called for “a new distribution capability,” industry-speak for catering to and “tailoring” price and services only to passengers who book directly on the airlines’ web sites.
In other words, let’s markedly increase our efforts to sell to directly to the customer and cut out middlemen like Expedia and Orbitz.
Pauline Frommer, writing for the Toronto Star quotes IATA CEO, Tony Tyler, as saying that customers expect to be recognized when they shop online, and are used to receiving “tailored offerings” based on “past purchasing behavior.”
The key here, if you can believe the airlines, is that third-party booking sites foster anonymity. But passengers who book directly using an airline’s web site become known to the airlines, and rewarded accordingly.
What will the rewards look like to these “loyal customers”? Who can say for sure. But probably better seat selection, waiving of fees, lower prices…special service.
Of course customers will lose the ability to compare airline and hotel prices and get the cheapest tickets, but just maybe that’s the price of loyalty, and being treated like an individual. Sounds good to me.