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OTAs regaining ground

August 27, 2008 | Online Travel

About 61% of online travel last year was purchased directly from suppliers, compared with about 50% in 2003. Now, online travel agencies are regaining some ground by offering aggressive deals and highlighting package pricing.

When travel booking first came to the Web, online travel agencies like Travelocity.com and Orbitz.com drew the bulk of sales, in large part because they could scour many airline and hotel deals all at once and offer discounted fares. Later, they began charging booking fees that have lived on through today—now usually between about $5 and $7. More recently, travelers have gone directly to the “suppliers,” such as airlines and hotels, drawn by the absence of booking fees, by price guarantees and sleeker Web design. About 61% of online travel last year was purchased directly from suppliers, compared with about 50% in 2003. Now, online travel agencies are regaining some ground by offering aggressive deals and highlighting package pricing.

In its largest sale ever, Expedia this month announced it will offer 50% off on stays of four nights or more at about 125 hotels booked by Sept. 2. Priceline.com, which offers blind bidding on airline tickets as well as traditional online-agency services, has seen sales strengthen since it stopped last summer charging booking fees on airline tickets. And in June, Orbitz launched its Price Assurance program: If a customer buys an airline ticket, and another customer then books the same flight at a lower price, Orbitz automatically sends a check to the first customer for the difference.

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