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Expedia Acquires Travelocity: Here’s What the Deal Means for the Travel Industry

February 05, 2015

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Two of the biggest brands in travel services are coming together as Internet booking platform Expedia acquires online travel agency Travelocity for a deal reportedly worth $280 million.

The acquisition expands Expedia’s broad portfolio of travel reviews and travel service sites, which already includes Hotels.com, Hotwire, CarRentals.com, Egencia, Wotif.com, and many others. Travelocity – which offers hotels, cars, flights, travel deals, vacation packages, and online travel reviews – had strategically agreed last year to have the technology platforms for its US and Canada websites powered by Expedia, as well as to enjoy access to Expedia’s supply and customer service program.

“Travelocity is one of the most recognized travel brands in North America, offering thousands of travel destinations to more than 20 million travelers per month,” said Dara Khosrowshahi, Expedia President and Chief Executive Officer. “The strategic marketing agreement we’ve had in place has been a marriage of Travelocity’s strong brand with our best-in-class booking platform, supply base, and customer service. Evolving this relationship strengthens the Expedia family’s ability to continue to innovate and deliver the very best travel experiences to the widest set of travelers, all over the world.”

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Added Tom Klein, President and CEO of Sabre Corp., the parent company of Travelocity: “We’ve had a long and fruitful partnership with Expedia, most recently by partnering to strengthen the Travelocity business. So our decision to divest Travelocity is a logical next step for us both.”

What does this deal mean to travelers and business owners alike? According to reports, Expedia looks like it will retain the Travelocity brand, but this time it will have more control over the amount of marketing effort put into the site.

Skift’s Dennis Schaal offers another analysis. “The average traveler probably won’t realize that when they book a deal on Travelocity now, they are actually booking through Expedia and that lots of the travel deals you see on Expedia and Travelocity will be the same or similar.”

“Even if Expedia gobbled up Travelocity, Orbitz and a few other big travel sites, it wouldn’t necessarily mean the reduction in competition will lead to higher prices,” writes Christopher Elliott, columnist for the Washington Post. “As a matter of fact, thanks to a little industry practice called ‘price parity,’ hotel rates are often within a few dollars of each other – hardly something to get excited about.”

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