We all know Expedia, Travelocity, and Orbitz. These companies are OTAs and are the dominant players in the industry. How dominant? According to Expedia's Q4 2005 conference call, "75% of U.S. travel shoppers online visit one of [Expedia's] sites prior to making a purchase."

Think of OTAs as Travel 1.0. These companies took the traditional travel agency business and moved it online. You can call up any of the OTAs and book a flight, change a departure time, or plan a vacation. A traveling Gnome might even make sure a hotel honors your reservation. While the OTAs might charge you fees for some or all services, you get peace of mind and a guarantee that someone has covered your back.

From the travel supplier perspective (airlines, hotels, car rental companies, etc.), OTAs are a friend you love to hate. After 9/11 and the SARS epidemic, the OTAs provided a valuable distribution channel for distressed travel suppliers.

Fast forward to today, though, and the travel suppliers would much rather have people book directly through their own sites versus through an OTA where they have to pay high fees and give up "ownership" of the customer. Because of this, a number of key travel suppliers like JetBlue and InterContinental Hotels do not list inventory through the OTAs.

Travel search engines will never run a call center. Travel search engines will never have a traveling Gnome to guarantee a trip is satisfactory. Travel search engines use technology to help consumers book a flight, hotel, or car as quickly and efficiently as possible. Through SideStep, Kayak, Mobissimo, and FareChase, a consumer can search about a hundred suppliers for the best travel option and then click through to the travel supplier to book. In simple terms, there's no real hand holding with travel search engines. These companies are basically lead generation services.

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