Behind the Scenes Gossip in Online Travel Booking

Skift has developed an amazing piece on the birth of online travel, collecting stories that help shape our understanding of how we got to where we are today, at least from a business perspective.

At a macro-level, online booking put the traditional brick and mortar travel agencies out of business. There’s still a significant role for travel specialists in high end trips. But there has to be a large margin to cover human intervention in travel, something that doesn’t make sense for basic air or hotel bookings.

Something was lost in the process. Not all travel agents were any good, of course. But with consumers sent to the web to do it themselves for the most part there’s little guidance on what the best itinerary for any given traveler really is, whether a connection through Chicago in winter makes sense, or which hotel is actually the best match for a customer’s often-unstated (and perhaps inarticulable) preferences.

As a result an average trip involves searching ten websites, the landscape is confusing, though the next stage in online booking will begin to ameliorate the problem as sites compete to better anticipate consumer needs in order to convert site visitors into bookings rather than losing eyeballs to the 7th or 8th website visited. Tools like RouteHappy make understanding an airline’s offerings better. Traveler photos are still useful at TripAdvisor and those are being integrated into booking as TripAdvisor attempts to become a resevations tool.

But turning the clock back 20 years it was unclear to some players at the time that we’d get there. According to Skift,

  • American Airlines and Microsoft considered a joint venture instead of each launching their own systems (Travelocity by Sabre which was then-owned by American and Expedia by Microsoft).

  • Priceline originally wanted Bill Cosby as their pitchman instead of William Shatner, but Cosby was too expensive.

  • Bob Crandall told Priceline’s founder, prior to the launch of Name Your Own Price airfare bidding, “Jay let me just be perfectly clear: We would be better off if you were hit by a truck.”

  • Amadeus took a 20% stake in ITA Software in 1998. But the head of development for Amadeus in France worked to scuttle the partnership because he “feared for the substantial number of Amadeus jobs that the skeleton and more efficient ITA crew and technology would make superfluous.” So French…

  • The four original founding airlines of Orbitz (Delta, United, Northwest and Continental) were against bringing American onboard as a founder after AA spun off Sabre and thus Travelocity. However Orbitz, as the airlines’ answer to online booking competition, eventually did include American. Ironically Orbitz was later sold and became a rival of the airlines, with American often in court and contract disputes.

  • Orbitz was originally just a threat by the airlines “”to pressure Expedia into giving them a huge stake in the company so they could control the online distribution of flight tickets and therefore counter the power of then-top dog Travelocity.” When the ploy didn’t work, they actually launched the site.

  • Expedia considered buying a dozen years ago, before Priceline did. because Priceline’s cash cow, and is a major competitor to the Expedia/Travelocity/Orbitz conglomerate we have today.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. is bringing humans back into the equation to accomplish our goal of enabling one-tap booking.

    For most international bookings and hotels, the problem is not that there isn’t enough margin for humans to intervene. But, an average traveler shops around and the quote to conversion rate for human agents is ~10%. This changes the game

  2. “At a macro-level, online booking put the traditional brick and mortar travel agencies out of business. There’s still a significant role for travel specialists in high end trips”

    Gary you could not be more wrong of that said above. Yes about half of all travel agencies went out of business and most of those were the kind run as a hobby and tax write off. Most of those surviving like myself remain full service of all types of trips from one ways from New York to Boston to round the world cruises.

    The most surprising thing is that the greatest source of growth for today’s brick and mortar travel agency is the “Millennial”. Not Grandma and Grandpa who you might think. They are at home trying to be “cool” spending hours on end booking a one way from NY to MIA!

  3. Average trip cost not sure without some research. That said, over 50 per cent of my company’s volume comes from air, most of that being purchased without any kind of additional product (like hotel, car, etc) Many customers often research the information themselves, copy an paste in an email, then asking us to book and ticket, often knowing that with our fees the price may very well be higher.

    Bottom line, I love selling “air only”. It is cut and dry with no selling time involved. Therefore it is my most profitable product!

  4. Gary, after the Priceline and Expedia groups — what major competitors are remaining?

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