Depending on whom you talk to, Travelocity’s unexpected announcement last month that it has reached a strategic marketing agreement with longtime rival Expedia will either create a dominant new Internet travel agency, give consumers access to more hotel choices or raise prices.
All three things could happen, actually, but the conjecture surrounding the announcement reminded me of the fallout from the last big online travel deal. After Priceline’s $1.8 billion purchase of travel-search site Kayak.com in 2012, I received an email from someone who identified himself as a reader named Ben Tester.
As part of that purchase, Priceline promised to run Kayak independently, which is important because Kayak purports to display unbiased prices from hundreds of online sources. But Tester charged that since the acquisition, Kayak had quietly started to list hotel results from another Priceline-owned site without including fees and taxes, making its prices look lower “and misleading consumers.”
What’s happening behind the curtain in the online travel world matters. Expedia and Travelocity are the No. 1 and No. 3 online travel agencies, respectively. Priceline also owns Booking.com, a dominant hotel website. And of course, Google is eyeing the online travel world through a string of acquisitions such as ITA Software, Frommer’s and Zagat. Soon, we may all be buying our travel from the same place.
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