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> You would think the internet would especially be able to split ... If it isn't obvious yet, the enormous reach and scale of the internet does the exact oppos

> You would think the internet would especially be able to split ... If it isn't obvious yet, the enormous reach and scale of the internet does the exact opposite, it basically guarantees consolidation. Booking and Expedia each used to be 4 or 5 independent companies. The booking engines wield power by de-listing any operators who offer lower prices anywhere else, and none of the hotel chains can risk not appearing on the sites, even more so when there are only two.

lotsofpulp 2y ago
The hotel chains can get together and offer a website showing lower prices to their rewards members. In fact they did, called roomkey.com Hilton/ihg/marriott/hyatt/choice/wyndham options could all be searched simultaneously, and you get the lowest price and the hotels avoid paying commission to Expedia and booking. But they shut it down. I wonder if it was because hotels are usually franchised, and the brands get a percentage of revenue as royalty, so they don’t care about commissions the hotel operators have to pay. So they decide to price discriminate via the travel agents. It should be similarly trivial for the airlines and car rental companies to get together and offer the same website. Isn’t it better to give customers a 7% discount rather than give booking/Expedia 15%? Obviously, reality is different so there must be a reason. I’m guessing the gains from price discrimination are more than the losses from commissions.
- listenallyall 2y ago
  The most likely explanation for shutting it down was the enormous cost of driving traffic to the site. After 20+ years of habits, it's hard to tell people about a new site, let alone get them to use it regularly. And given that hotel room prices change all the time, it's difficult to even prove they have the lowest prices. Plus it is hard to get competitors to work together on something. Orbitz was started by a partnership of airlines. It IPO'd and then was acquired by a private company, all within 3 years after launching. https://en.m.wikipedia.org/wiki/Orbitz https://en.m.wikipedia.org/wiki/Orbitz

lotsofpulp 2y ago

The hotel chains can get together and offer a website showing lower prices to their rewards members. In fact they did, called roomkey.com Hilton/ihg/marriott/hyatt/choice/wyndham options could all be searched simultaneously, and you get the lowest price and the hotels avoid paying commission to Expedia and booking. But they shut it down. I wonder if it was because hotels are usually franchised, and the brands get a percentage of revenue as royalty, so they don’t care about commissions the hotel operators have to pay. So they decide to price discriminate via the travel agents. It should be similarly trivial for the airlines and car rental companies to get together and offer the same website. Isn’t it better to give customers a 7% discount rather than give booking/Expedia 15%? Obviously, reality is different so there must be a reason. I’m guessing the gains from price discrimination are more than the losses from commissions.

listenallyall 2y ago
The most likely explanation for shutting it down was the enormous cost of driving traffic to the site. After 20+ years of habits, it's hard to tell people about a new site, let alone get them to use it regularly. And given that hotel room prices change all the time, it's difficult to even prove they have the lowest prices. Plus it is hard to get competitors to work together on something. Orbitz was started by a partnership of airlines. It IPO'd and then was acquired by a private company, all within 3 years after launching. https://en.m.wikipedia.org/wiki/Orbitz https://en.m.wikipedia.org/wiki/Orbitz