Many travelers have already noticed the effects of consolidation in the airline business. Less flight choices, service cuts, and a “what, me worry?” attitude towards customer service.
And should the majors put a few of their discount rivals out of business, prices will certainly increase as well.
Now quietly, that same consolidation is taking place in the online travel agency business. Ellen Creager of the Detroit Free Press wrote a fascinating article on the subject:
In short, four companies own most of the largest online agencies.
Expedia, Inc, which curiously enough was started by Microsoft, has the lion’s share of the business. They own Expedia.com, Hotels.com, Tripadvisor.com, Hotwire.com, Venere.com, Cruisecritic.com, Booking Buddy.com, Smartertravel.com, Airfarewatchdog.com, and IndependentTravel.com.
Sabre Holdings, one of the oriiginal GDS companies once owned by American Airlines, now in turns owns Travelocity.com, LastMinute.com and IguUgo.com. And they still operate the Sabre reservations system.
Orbitz Worldwide owns Orbitz.com, CheapTickets.com and RatestoGo.com
And Priceline, Inc owns Priceline.com, Travelweb.com and Lowestfare.com
Ms. Creager notices similar prices for the same hotels across different sites, and wonders if it might be due to reduced competition. And certainly while the hotels might give the same wholesale rate to each company, it does seem eerily reminiscent of the airlines who might have exactly the same $218 fare between two cities. But it strikes me the consolidation has other problems.
It does mean there is less customer service incentive if there aren’t that many options. Especially if this trend continues.
The whole hotel and cruise rating system strikes me as another and potentially larger issue. Especially with Expedia, Inc. TripAdvisor.com is supposed to be an independent rating site, although customers can also use links to make bookings. Ditto CruiseCritic.com.
A consumer could decide that they wanted an independent review and for that reason NOT book through the TripAdvisor or CruiseCritic site, and then end up booking a high rated hotel or cruise on another site owned by the same company.
Other travelers might just try to get a sample of different star ratings of a property or cruise. And in actuality they could end up not booking a consistent property, but just one with the same ratings by sites with the same owners.
In addition, what happens when a hotel offering a special package on one site, is slammed as a complete dump by a reviewer on another of the same company’s sites? While there is no evidence that any company is withholding reviews, it could become a conflict of interest.
It will be interesting to see if this consolidation continues. When airlines and cruise lines merge, their executives like to talk about economies of scale as a benefit for the consumer. Somehow, I don’t think most consumers these days would agree with them.
Janice Hough is a California-based travel agent a travel blogger and a part-time comedy writer. A frequent flier herself, she’s been doing battle with airlines, hotels, and other travel companies for over three decades. Besides writing for Travelers United, Janice has a humor blog at Leftcoastsportsbabe.com (Warning, the political and sports humor therein does not represent the views of anyone but herself.)
