Who benefits when Expedia buys the competition?
Expedia announced Thursday that it’s acquiring rival travel company Orbitz for $1.6 billion. This comes on the heels of Expedia buying Travelocity a few weeks ago, and leaves Priceline as its only major competitor in online travel booking.
Expedia already has significant bargaining power with airlines and hotels to negotiate things like fees and access to inventory.
“They’ve got a lot of customers at their disposal, a big share of the market, so they can command supplier’s attention in a way that smaller players cannot,” says Doug Quinby, vice president of research with research firm Phocuswright.
Thursday’s news shouldn’t affect consumers’ travel costs one way or the other, says Rich Maradik, founder of nSight Travel, a market research firm. “In the end this just puts more pressure on hotels, and squeezes their profits,” he says.
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