The competitive landscape for online travel agencies has shifted from a simple price war to a battle for customers by building brand loyalty, the chief executive of Travelocity said on Monday.

Companies like Travelocity, a unit of Saber Holdings, are working to expand their brands by personalizing trips by recommending songs or movies about destinations or offering free photo developing for returning vacationers, said CEO Michelle Ann Peluso.

Peluso, speaking at the PhocusWright Executive Conference for travel professionals in Orlando, said the online travel market has changed and that seasoned travelers know that they can use the Internet to sniff out cheap bookings.

Therefore, agencies are being challenged to anticipate and reduce travel hassles and make the experience more pleasant.

"Are we as good as we could be? Nope. Absolutely not yet," Peluso said.

Travelocity competes directly with other agencies like Expedia Inc. and Priceline. But they also face vigorous competition from suppliers' direct sites and travel search engines who locate cheap bookings.

Online travel agencies differentiate themselves from travel search engines by selling bookings, usually for an additional fee, and by offering package deals that combine airline tickets, lodging, car rentals and entertainment.

Price is not the only consideration, Peluso said.

"Price is clearly the foundation in our industry," she said. "(But) price matters in the right context."

Travelocity and other agencies already have worked to limit potential travel hassles. Some notify travelers of flight delays and cancellations.

Now the key is to make the experience more fun, Peluso said