8 ms·

Expedia Buys Orbitz for $1.6B in Cash

161 points by frankacter 12y ago

untog 12y ago
All these sites seem to use the exact same backend services, so it's difficult to care. About the only site I use regularly is hotels.com because they have a loyalty scheme (book 10 nights, get 1 free) - and even then I'm sure there's some catch I'm not aware of that makes them the same as everyone else.
- jeletonskelly 12y ago
  It's actually a big deal in the travel industry. Yes, for the most part they are all the same. Online travel sites have negotiated contracts with the hotels that prevent them from selling their inventory at lower prices to anyone else, so you're not going to get a much better deal where ever you book. The big thing here is this makes the Expedia umbrella by far the largest distribution channel for online hotel reservations. It gives them quite a bit of leverage when negotiating contracts with the hotel chains in the future. Especially when they are responsible for something like 35% of all the hotels' reservations.
  - coob 12y ago
    If the no lower prices thing is true, how come comparison engines like triage have such wildly varying prices? Are different bookers taking hits on their margins to drive business?
    - lotsofpulp 12y ago
      Most large hotel chains have a best price guarantee which states the hotel's official website will have the lowest advertised price you can get anywhere else (e.g. expedia). But, non advertised prices can be lower such as on Hotwire, where you don't know which hotel you are reserving, you only get to choose the price and have to stay wherever Hotwire makes the greatest margin. If you do find a lower advertised price for a specific hotel, you can usually call their 800# and get it price matched and something extra. http://www.marriott.com/hotel-prices/travel.mi http://www.marriott.com/hotel-prices/travel.mi http://www.starwoodhotels.com/bestrate/index.html http://www.starwoodhotels.com/bestrate/index.html http://hiltonworldwide.hilton.com/en/ww/ourbestrates/guarantee.jhtml http://hiltonworldwide.hilton.com/en/ww/ourbestrates/guarant... http://www.hyatt.com/hyatt/specials/offers/offer-details_hotels_20.jsp;jsessionid=00D57D4DCEFA05EE1CB073887DA020F0.atg04-prd-atg3?offerId=40501986&icamp=hy_brg_footer_en&language=en http://www.hyatt.com/hyatt/specials/offers/offer-details_hot... https://www.ihg.com/hotels/us/en/customer-care/lowest-internet-rate-terms-conditions https://www.ihg.com/hotels/us/en/customer-care/lowest-intern...
    - DisView 12y ago
      When a hotel signs a contract with an OTA (Online Travel Agency), it is (was) a common practice to include a 'price parity' clause, i.e. the hotelier cannot send different prices for the same offer to different websites, and the OTA agrees on not modifying the final price specified by the hotelier. But the reality is that: - Not all the hoteliers update all the rates simultaneously (through a channel manager, for example) - Some the hoteliers are not selling the same rooms or rates (breakfast, cancellation options...) in all the OTAs. - Certain OTAs that are just re-selling inventory from wholesalers and the commission applicable to an offer can be modified by the OTA at its will. There are more 'shady' tricks that can lead to different prices for the same hotel, but it would be too long to write all of them in a post.
      - toomuchtodo 12y ago
        > There are more 'shady' tricks that can lead to different prices for the same hotel, but it would be too long to write all of them in a post. I'd love to see a blog post on this, and would gladly send beer/coffee money your way to see it!
        DisView 12y ago
        I am currently working in an OTA and I am not in a position where I can openly share certain things, so I am sorry that blog post wont see the light soon. But, I can share some pricing strategies that I've noticed that our competitors are doing, for example: 1) Different prices for different countries, example: http://www.amoma.com/hotel.php?id=30800&key=2015022020150221120500002050000205000011111836&page_num=&hotelname=dingdong&f_ref=&min=1&max=500 http://www.amoma.com/hotel.php?id=30800&key=2015022020150221... and open it again in english, using an incognito window (important): http://www.amoma.com/hotel.php?id=30800&key=2015022020150221120500002050000205000011111836&page_num=&hotelname=dingdong&f_ref=&min=1&max=500&langid=4 http://www.amoma.com/hotel.php?id=30800&key=2015022020150221... 2) Most of the hotels set the price using their local currency, and when the prices are converted to the customer currency, every OTA can decide to be optimistic or pessimistic. They could even decide to use a different conversion rate depending on the booking windows (number of days to checkin). 3) Price parity clause can be avoided if the price is not 'public' (http://www.osborneclarke.com/connected-insights/blog/hotels-eu-authorities-continue-crack-down-price-parity/ http://www.osborneclarke.com/connected-insights/blog/hotels-...) so now most of the OTAs are trying hard to get the users logged in before booking. Once the user is logged in, the prices are not 'public', so the OTA can lower their commission slice of the price. 4) Some hotels have a specific (cheaper) rate for 'package bookings' i.e. the room is booked together with another service (flight, car rental...). But some OTAs decided that a flight booked earlier was enough to offer a 'package rate' to the customer. See: http://www.tnooz.com/article/expedia-playing-hardball-hotel-rate-parity-hyatt-starwood/ http://www.tnooz.com/article/expedia-playing-hardball-hotel-... Thanks for the beer, we may have an opportunity to drink it together in the future.
  - 0cean 12y ago
    While the rates are generally the same because of the rate parity agreement these OTAs have with hotels. One way you can get a better deal is booking direct with the hotels. Hotels can offer loyalty rewards, which is not covered by the rate parity agreement, as well as additional on property benefits. My company, https://universalpoints.com https://universalpoints.com offers a 5% cash back that you can earn on your first stay at participating hotels for booking direct with the hotel. We are also working on adding a service where you can use the cash you've earned for reduced room rates and upgrades.
- deleted 12y ago
  [deleted]
- makmanalp 12y ago
  This is true in general terms, but the reality is that these sites are charged to use backend services, so they cache results. So how smart the cache invalidation and refresh process is matters a lot to a user, especially during times when there is a lot of contention (think pre-christmas). If there is anything that makes a user bounce, it's telling the user that there exists a ticket for a given price, and the user discovering otherwise after clicking through or starting the payment process. Then there are a lot of providers who have APIs but are not part of a large backend service. Hotels especially are notorious here. Furthermore a lot of providers still don't have APIs (yes, in this day and age) and need to be scraped, and will agree to doing so - the better you scrape the more alternatives your users get. But yeah. In an ideal world what you're saying would be true. And I agree that this is probably a userbase acquisition - market consolidation move rather than a tech one. disclaimer: used to work at kayak.
- kelukelugames 12y ago
  Yes, all the sites use the same backend. But customers just like you are fiercely loyal to their brand.
- MichaelGG 12y ago
  The catch, in my anecdotal experience, is that third parties have terrible integration with the hotels. In some cases, they fax a reservation using a company credit card, to pay on your behalf. End result is some percent of the time, this gets messed up and you end up dealing with an annoyed person on check in that sometimes ends up having to get the agency on the line to sort it out. Same for flight bookings. I've never found the attraction of booking through third parties; it only adds a failure point. Maybe small or specialized agencies are the exception, like Amex's travel service (which, I think, used a platform like Expedia's, but they had fantastic phone options and would always go figure stuff out on my behalf.)
  - zippergz 12y ago
    Indeed, the only thing I use the third-party sites for is search. For example, to get a quick overview of which airlines have flights to the place I'm going to, or what the available hotels are and their relative prices. And then I go and book directly through the airline or hotel. The price difference is usually minimal or non-existent, and it drastically reduces opportunities for problems.
  - toomuchtodo 12y ago
    > The catch, in my anecdotal experience, is that third parties have terrible integration with the hotels. In some cases, they fax a reservation using a company credit card, to pay on your behalf. I know for a fact Hotel Tonight does this, as I've seen the fax from the front desk clerk with their corporate mastercard number (partly redacted) on it.
  - _delirium 12y ago
    I agree in many cases, but two cases in which I book through the third-party sites: 1. For hotels, where the hotel itself doesn't actually have an online-booking system. Not very common in the U.S., but common among smaller hotels in Europe. Often a third party (most often booking.com) is the only way to book these hotels online. 2. For flights, where Orbitz or Expedia are able to put together a multi-airline itinerary that I can't get those airlines' own sites to return. The last time I used Orbitz was for this reason: it was able to come up with a round-trip ATL-CPH with Delta one way and KLM the other way, with a good price and times that were convenient for me. The fare rules work because they're partner airlines (so it ends up billed as a round-trip, not two one-ways), but I couldn't manage to get either the KLM or Delta websites to offer me that combination, despite quite a bit of fiddling.
- mdev 12y ago
  hotels.com is owned by Expedia
- ryanSrich 12y ago
  I've always found that if I know and book ahead of time I can get a massive deal on hotels simply by calling the front desk. It's usually 10-30% cheaper than booking with any service online. I'm not sure why this is the case but if there's a service that can get me front desk rates, I'd be more than happy to switch.
  - function_seven 12y ago
    Hell, even if the direct hotel booking is a little more expensive, I still go that route. I've been burned by hotels referring me to Expedia when problems arose. They can't do that when you're direct booked. I still use the travels sites for shopping purposes, then visit the hotel's site directly when I've made a decision. (Maybe I should be staying at better places)
smackfu 12y ago
Surprised there are no anti-trust concerns.
- kelukelugames 12y ago
  why would there be? priceline is already bigger than expedia. source: know people who work at both places and internet. https://www.google.com/finance?q=NASDAQ%3APCLN&ei=j8zcVNvlGoH_igL744D4DA https://www.google.com/finance?q=NASDAQ%3APCLN&ei=j8zcVNvlGo... https://www.google.com/finance?q=NASDAQ%3AEXPE&ei=1czcVIimKrC1iAK124DgCA https://www.google.com/finance?q=NASDAQ%3AEXPE&ei=1czcVIimKr... look at profits and market cap.
  - colinbartlett 12y ago
    Who uses Priceline? Do they have any other brands besides their main one? I always thinking of them as that "name your own price" thing, the mechanics of which never appealed to me.
  - milesskorpen 12y ago
    Should clarify that "Priceline" is primarily Booking.com, not the amusing pricing opacity company out of CT (even if they did make the good decision to buy Booking.com years back).
    - kelukelugames 12y ago
      Do you have a source that most of their traffic is from booking.com?
      - smackfu 12y ago
        Priceline breaks down their financials into domestic and international bookings, based on the location of the unit doing the booking. Booking.com is based in Amsterdam so is counted as international bookings, along with agoda.com and some rental car service. Priceline is domestic. For the latest quarter, the booking numbers were $12B foreign vs $1.7B for domestic.
sk2code 12y ago
I applied for a Job at Orbitz yesterday and today this news came. Orbitz ratings are pretty solid on Glassdoor and that makes them one of the best companies to work for in the Chicagoland area, hope it remains the same after the merger.
- Kiro 12y ago
  Fun fact: Rich Barton founded both Expedia and Glassdoor.
- deleted 12y ago
  [deleted]
- bechampion 12y ago
  I've worked for orbitz for 7 years , good place to work , don't know what the outcome of this acquisition will be tho.
  - dwd 12y ago
    This is probably a fair indication of what might happen http://www.smh.com.au/business/wotif-boss-and-other-staff-get-a-permanent-vacation-following-expedia-takeover-20150125-12xrbu.html http://www.smh.com.au/business/wotif-boss-and-other-staff-ge...
jhulla 12y ago
According to Forbes, hotels represent 97% of Priceline's revenue with 23% margins. Car rentals and cruises represented 9% margins and airlines at 3% margins. Assuming Expedia and Orbitz have similar profiles, then this is really a market share fight to capture the largest pool of hotel transactions. http://www.forbes.com/sites/greatspeculations/2013/01/10/breaking-down-pricelines-business-and-stock-drivers/ http://www.forbes.com/sites/greatspeculations/2013/01/10/bre...
- kelukelugames 12y ago
  Yes, the SO works for one of them. The employee discount can go up to 50% for hotels and pretty much nothing on flights.
- jessriedel 12y ago
  Does anyone know why there's such a huge disparity in these different types? I'd think the revenue would start getting driven down toward the value added, and I can't imagine the value added by a website varies so much between plane tickets, car rentals, and hotel booking.
  - brianpgordon 12y ago
    Airlines are already operating on such razor-thin margins that it's not surprising that Priceline can't extract much profit from those deals.
dingaling 12y ago
The origins of Expedia "And Bill said, ‘No let’s start it inside Microsoft. And if it wants to be free we’ll consider it.’" http://www.wired.com/2013/06/rich-barton-empowers-people-and-picks-fights-very-profitably/ http://www.wired.com/2013/06/rich-barton-empowers-people-and...
- encoderer 12y ago
  Rich Barton went on to found Zillow. He's cut an impressive path.
bt3 12y ago
It seems as though the whole travel industry is excited about the news: EXPE - 90.45 +15.64% OWW - 11.65 +21.05% PCLN - 1092.83 +3.09% TRIP - 82.03 +21.94% Worth noting as well that the deal was based upon 115M Orbitz shares @ 12/ each, which makes it a $1.38B. The $1.6B represents the enterprise value.
stevenj 12y ago
In all cash deals like this, is there just a bank wire transfer that's made in the purchase amount from one company's account to the other's once everything has been approved and the deal has closed?
- giarc 12y ago
  I can't answer your question directly, but I'm reminded of a story a friend once told. He was a new lawyer at a large firm. He was helping with a large deal and the bank couldn't get a hold of the lawyers listed above him. The bank called him and said "Is this $12.5 million transfer approved?" Do which he said yes, and 1 second later, 12 million dollars was moved from one account to another. So perhaps, with some authorization calls, it is as simple as a wire transfer.
  - chx 12y ago
    My brother once put in a 1M EUR transaction instead of 1M HUF he wanted and it went through without a hitch... even though his account didn't have that sort of money or even anything close to that. That was weird and disconcerting.
  - ToastyMallows 12y ago
    Geez, to have that authority. Crazy.
- Elessar 12y ago
  A simple SWIFT transaction (wire payment) is generally enough, though in order for the actual transaction to move, there are confirmation and settlement procedures. All of which depend on the company and bank policies (for example, American Companies are all by law offered the option to use 4-eye verification processes to prevent a single person from making a tx, two to confirm etc etc). Giarc's story is the confirmation process, likely being chased down by the back office at the bank as they go through the various procedures that minimize fraud and mistakes involved when moving large sums of cash. If FX is involved, then they'll likely need to purchase the sum in a different currency (if they do not already have cash in that currency) and use the result to settle in another bank account. For example, an American company purchases 15 million euro to settle in a German bank account that belongs to the purchased.
tiffanyh 12y ago
3 weeks ago, Expedia acquired Travelocity for $280M. http://dealbook.nytimes.com/2015/01/23/expedia-buys-travelocity-for-280-million-in-cash/?_r=0 http://dealbook.nytimes.com/2015/01/23/expedia-buys-traveloc... This Orbitz deal ($1.6B) makes the Travelocity deal ($280M) look cheap.
- xasos 12y ago
  Aren't Expedia, Orbitz, and Travelocity some of the biggest online travel sites?
  - burnte 12y ago
    Yes, but Priceline is bigger, hence the buyouts to be able to compete better.
    - martin1975 12y ago
      It's the Shatner factor.
- breckenedge 12y ago
  I need to check my sources, but I believe the Travelocity deal excluded much of Travelocity's technology, it was just a brand-name purchase. Edit, sources: > Sparks was brought in a couple of years ago to turn around the company, which needed a wholesale upgrading of its back-end systems in order to make a go of it, but apparently the transition fell short. [1] [1] http://skift.com/2013/08/22/travelocity-gives-in-sites-to-be-powered-by-expedia/ http://skift.com/2013/08/22/travelocity-gives-in-sites-to-be...
  - alecco 12y ago
    Very good idea not to get the mess of Travelocity technology.
  - joneholland 12y ago
    Expedia was already powering the Travelocity backend back in 2014 as part of a strategic deal because travelocity had failed to modernize their stack. . The latest acquisition simply bought the brand.
geverett 12y ago
Tis means that hotels in the Us and Europe now effectively have only two partners to consider for distributing their inventory. This means less competiton to drive commissions and prices down. Bad news for the consumer. Good analysis on Skift with more details: http://skift.com/2015/02/12/its-expedia-against-everyone-else-after-orbitz-and-travelocity-deals/ http://skift.com/2015/02/12/its-expedia-against-everyone-els...
aepearson 12y ago
Wait until they buy Homeaway next..
- stephengoodwin 12y ago
  Homeaway focuses on vacation rentals and is in a very different market than Expedia and Orbitz. It's not out of the realm of possibilities, but Expedia and Orbitz are much closer competitors than either would be with Homeaway.
  - joneholland 12y ago
    Expedia syndicates HomeAway listings on their site now.
    - aepearson 12y ago
      At Homeaway's most recent national conference it seemed pretty clear that this was the first step in acquisition.
  - aepearson 12y ago
    There is a lot of back story you aren't aware of. This is not an "if" it's a "when". They have been in bed together for years now. This is coming from someone who works specifically in the Vacation Rental industry.
- toomuchtodo 12y ago
  Or perhaps AirBNB.
acomjean 12y ago
I interviewed at a travel company last year. It was interesting because they didn't do any of the backend booking stuff (for flights), but instead seemed to like to direct you to other sites to book and then take a referal cut if you buy. This was a weird business where the person buying the travel was the product (I didn't like it). Expedia is one of the direct bookers. I use them. The UI is not pretty but functional enough.
- petercooper 12y ago
  I think Hipmunk (the site founded by some of the Reddit founders) works like that. It's not unusual though. Here in the UK, things like insurance and utilities are increasingly sold in this way (we call them "price comparison" sites). I believe(?) Shazam also makes most of its money by referrals to iTunes and Amazon.
  - dot 12y ago
    that is how kayak and tripadvisor make most of their money too. Ever notice how photo galleries for hotels on tripadvisor open new windows? they're making sure you have their cookie when you book it on hotels.com, expedia, booking.com, etc later.
jrochkind1 12y ago
i've been using kayak instead for quite a while now. Expedia bought them yet? Nope, looks like Priceline did. Well, it's still a good site last time I checked.
0505gonzalez 12y ago
Really interesting strategy Expedia has, having these new brands benefit from Expedia's tech stack.
greatquux 12y ago
Anyone know if Orbitz is still built on lisp as pg famously documented so long ago?
- itazula 12y ago
  A lot of job listings here: https://twitter.com/OrbitzTalent?original_referer=https%3A%2F%2Fcareers.orbitz.com%2F&profile_id=70411733&tw_i=565903637235658752&tw_p=embeddedtimeline&tw_w=405387587155533824 https://twitter.com/OrbitzTalent?original_referer=https%3A%2... A quick scan of the software engineering positions did not, however, uncover any Lisp-related jobs.
- SeanLuke 12y ago
  ITA is built on lisp. http://en.wikipedia.org/wiki/ITA_Software http://en.wikipedia.org/wiki/ITA_Software Orbitz, along with Kayak and many others, is an ITA customer.
nnoitra 12y ago
So they put their money in bags and give it to them?
niels_olson 12y ago
Is Orbitz still running lisp code?

161 points by frankacter 12y ago

untog 12y ago

All these sites seem to use the exact same backend services, so it's difficult to care. About the only site I use regularly is hotels.com because they have a loyalty scheme (book 10 nights, get 1 free) - and even then I'm sure there's some catch I'm not aware of that makes them the same as everyone else.

jeletonskelly 12y ago
It's actually a big deal in the travel industry. Yes, for the most part they are all the same. Online travel sites have negotiated contracts with the hotels that prevent them from selling their inventory at lower prices to anyone else, so you're not going to get a much better deal where ever you book. The big thing here is this makes the Expedia umbrella by far the largest distribution channel for online hotel reservations. It gives them quite a bit of leverage when negotiating contracts with the hotel chains in the future. Especially when they are responsible for something like 35% of all the hotels' reservations.
- coob 12y ago
  If the no lower prices thing is true, how come comparison engines like triage have such wildly varying prices? Are different bookers taking hits on their margins to drive business?
  - lotsofpulp 12y ago
    Most large hotel chains have a best price guarantee which states the hotel's official website will have the lowest advertised price you can get anywhere else (e.g. expedia). But, non advertised prices can be lower such as on Hotwire, where you don't know which hotel you are reserving, you only get to choose the price and have to stay wherever Hotwire makes the greatest margin. If you do find a lower advertised price for a specific hotel, you can usually call their 800# and get it price matched and something extra. http://www.marriott.com/hotel-prices/travel.mi http://www.marriott.com/hotel-prices/travel.mi http://www.starwoodhotels.com/bestrate/index.html http://www.starwoodhotels.com/bestrate/index.html http://hiltonworldwide.hilton.com/en/ww/ourbestrates/guarantee.jhtml http://hiltonworldwide.hilton.com/en/ww/ourbestrates/guarant... http://www.hyatt.com/hyatt/specials/offers/offer-details_hotels_20.jsp;jsessionid=00D57D4DCEFA05EE1CB073887DA020F0.atg04-prd-atg3?offerId=40501986&icamp=hy_brg_footer_en&language=en http://www.hyatt.com/hyatt/specials/offers/offer-details_hot... https://www.ihg.com/hotels/us/en/customer-care/lowest-internet-rate-terms-conditions https://www.ihg.com/hotels/us/en/customer-care/lowest-intern...
  - DisView 12y ago
    When a hotel signs a contract with an OTA (Online Travel Agency), it is (was) a common practice to include a 'price parity' clause, i.e. the hotelier cannot send different prices for the same offer to different websites, and the OTA agrees on not modifying the final price specified by the hotelier. But the reality is that: - Not all the hoteliers update all the rates simultaneously (through a channel manager, for example) - Some the hoteliers are not selling the same rooms or rates (breakfast, cancellation options...) in all the OTAs. - Certain OTAs that are just re-selling inventory from wholesalers and the commission applicable to an offer can be modified by the OTA at its will. There are more 'shady' tricks that can lead to different prices for the same hotel, but it would be too long to write all of them in a post.
    - toomuchtodo 12y ago
      > There are more 'shady' tricks that can lead to different prices for the same hotel, but it would be too long to write all of them in a post. I'd love to see a blog post on this, and would gladly send beer/coffee money your way to see it!
      - DisView 12y ago
        I am currently working in an OTA and I am not in a position where I can openly share certain things, so I am sorry that blog post wont see the light soon. But, I can share some pricing strategies that I've noticed that our competitors are doing, for example: 1) Different prices for different countries, example: http://www.amoma.com/hotel.php?id=30800&key=2015022020150221120500002050000205000011111836&page_num=&hotelname=dingdong&f_ref=&min=1&max=500 http://www.amoma.com/hotel.php?id=30800&key=2015022020150221... and open it again in english, using an incognito window (important): http://www.amoma.com/hotel.php?id=30800&key=2015022020150221120500002050000205000011111836&page_num=&hotelname=dingdong&f_ref=&min=1&max=500&langid=4 http://www.amoma.com/hotel.php?id=30800&key=2015022020150221... 2) Most of the hotels set the price using their local currency, and when the prices are converted to the customer currency, every OTA can decide to be optimistic or pessimistic. They could even decide to use a different conversion rate depending on the booking windows (number of days to checkin). 3) Price parity clause can be avoided if the price is not 'public' (http://www.osborneclarke.com/connected-insights/blog/hotels-eu-authorities-continue-crack-down-price-parity/ http://www.osborneclarke.com/connected-insights/blog/hotels-...) so now most of the OTAs are trying hard to get the users logged in before booking. Once the user is logged in, the prices are not 'public', so the OTA can lower their commission slice of the price. 4) Some hotels have a specific (cheaper) rate for 'package bookings' i.e. the room is booked together with another service (flight, car rental...). But some OTAs decided that a flight booked earlier was enough to offer a 'package rate' to the customer. See: http://www.tnooz.com/article/expedia-playing-hardball-hotel-rate-parity-hyatt-starwood/ http://www.tnooz.com/article/expedia-playing-hardball-hotel-... Thanks for the beer, we may have an opportunity to drink it together in the future.
- 0cean 12y ago
  While the rates are generally the same because of the rate parity agreement these OTAs have with hotels. One way you can get a better deal is booking direct with the hotels. Hotels can offer loyalty rewards, which is not covered by the rate parity agreement, as well as additional on property benefits. My company, https://universalpoints.com https://universalpoints.com offers a 5% cash back that you can earn on your first stay at participating hotels for booking direct with the hotel. We are also working on adding a service where you can use the cash you've earned for reduced room rates and upgrades.
deleted 12y ago
[deleted]
makmanalp 12y ago
This is true in general terms, but the reality is that these sites are charged to use backend services, so they cache results. So how smart the cache invalidation and refresh process is matters a lot to a user, especially during times when there is a lot of contention (think pre-christmas). If there is anything that makes a user bounce, it's telling the user that there exists a ticket for a given price, and the user discovering otherwise after clicking through or starting the payment process. Then there are a lot of providers who have APIs but are not part of a large backend service. Hotels especially are notorious here. Furthermore a lot of providers still don't have APIs (yes, in this day and age) and need to be scraped, and will agree to doing so - the better you scrape the more alternatives your users get. But yeah. In an ideal world what you're saying would be true. And I agree that this is probably a userbase acquisition - market consolidation move rather than a tech one. disclaimer: used to work at kayak.
kelukelugames 12y ago
Yes, all the sites use the same backend. But customers just like you are fiercely loyal to their brand.
MichaelGG 12y ago
The catch, in my anecdotal experience, is that third parties have terrible integration with the hotels. In some cases, they fax a reservation using a company credit card, to pay on your behalf. End result is some percent of the time, this gets messed up and you end up dealing with an annoyed person on check in that sometimes ends up having to get the agency on the line to sort it out. Same for flight bookings. I've never found the attraction of booking through third parties; it only adds a failure point. Maybe small or specialized agencies are the exception, like Amex's travel service (which, I think, used a platform like Expedia's, but they had fantastic phone options and would always go figure stuff out on my behalf.)
- zippergz 12y ago
  Indeed, the only thing I use the third-party sites for is search. For example, to get a quick overview of which airlines have flights to the place I'm going to, or what the available hotels are and their relative prices. And then I go and book directly through the airline or hotel. The price difference is usually minimal or non-existent, and it drastically reduces opportunities for problems.
- toomuchtodo 12y ago
  > The catch, in my anecdotal experience, is that third parties have terrible integration with the hotels. In some cases, they fax a reservation using a company credit card, to pay on your behalf. I know for a fact Hotel Tonight does this, as I've seen the fax from the front desk clerk with their corporate mastercard number (partly redacted) on it.
- _delirium 12y ago
  I agree in many cases, but two cases in which I book through the third-party sites: 1. For hotels, where the hotel itself doesn't actually have an online-booking system. Not very common in the U.S., but common among smaller hotels in Europe. Often a third party (most often booking.com) is the only way to book these hotels online. 2. For flights, where Orbitz or Expedia are able to put together a multi-airline itinerary that I can't get those airlines' own sites to return. The last time I used Orbitz was for this reason: it was able to come up with a round-trip ATL-CPH with Delta one way and KLM the other way, with a good price and times that were convenient for me. The fare rules work because they're partner airlines (so it ends up billed as a round-trip, not two one-ways), but I couldn't manage to get either the KLM or Delta websites to offer me that combination, despite quite a bit of fiddling.
mdev 12y ago
hotels.com is owned by Expedia
ryanSrich 12y ago
I've always found that if I know and book ahead of time I can get a massive deal on hotels simply by calling the front desk. It's usually 10-30% cheaper than booking with any service online. I'm not sure why this is the case but if there's a service that can get me front desk rates, I'd be more than happy to switch.
- function_seven 12y ago
  Hell, even if the direct hotel booking is a little more expensive, I still go that route. I've been burned by hotels referring me to Expedia when problems arose. They can't do that when you're direct booked. I still use the travels sites for shopping purposes, then visit the hotel's site directly when I've made a decision. (Maybe I should be staying at better places)

smackfu 12y ago

Surprised there are no anti-trust concerns.

kelukelugames 12y ago
why would there be? priceline is already bigger than expedia. source: know people who work at both places and internet. https://www.google.com/finance?q=NASDAQ%3APCLN&ei=j8zcVNvlGoH_igL744D4DA https://www.google.com/finance?q=NASDAQ%3APCLN&ei=j8zcVNvlGo... https://www.google.com/finance?q=NASDAQ%3AEXPE&ei=1czcVIimKrC1iAK124DgCA https://www.google.com/finance?q=NASDAQ%3AEXPE&ei=1czcVIimKr... look at profits and market cap.
- colinbartlett 12y ago
  Who uses Priceline? Do they have any other brands besides their main one? I always thinking of them as that "name your own price" thing, the mechanics of which never appealed to me.
- milesskorpen 12y ago
  Should clarify that "Priceline" is primarily Booking.com, not the amusing pricing opacity company out of CT (even if they did make the good decision to buy Booking.com years back).
  - kelukelugames 12y ago
    Do you have a source that most of their traffic is from booking.com?
    - smackfu 12y ago
      Priceline breaks down their financials into domestic and international bookings, based on the location of the unit doing the booking. Booking.com is based in Amsterdam so is counted as international bookings, along with agoda.com and some rental car service. Priceline is domestic. For the latest quarter, the booking numbers were $12B foreign vs $1.7B for domestic.

sk2code 12y ago

I applied for a Job at Orbitz yesterday and today this news came. Orbitz ratings are pretty solid on Glassdoor and that makes them one of the best companies to work for in the Chicagoland area, hope it remains the same after the merger.

Kiro 12y ago
Fun fact: Rich Barton founded both Expedia and Glassdoor.
deleted 12y ago
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bechampion 12y ago
I've worked for orbitz for 7 years , good place to work , don't know what the outcome of this acquisition will be tho.
- dwd 12y ago
  This is probably a fair indication of what might happen http://www.smh.com.au/business/wotif-boss-and-other-staff-get-a-permanent-vacation-following-expedia-takeover-20150125-12xrbu.html http://www.smh.com.au/business/wotif-boss-and-other-staff-ge...

jhulla 12y ago

According to Forbes, hotels represent 97% of Priceline's revenue with 23% margins. Car rentals and cruises represented 9% margins and airlines at 3% margins. Assuming Expedia and Orbitz have similar profiles, then this is really a market share fight to capture the largest pool of hotel transactions. http://www.forbes.com/sites/greatspeculations/2013/01/10/breaking-down-pricelines-business-and-stock-drivers/ http://www.forbes.com/sites/greatspeculations/2013/01/10/bre...

kelukelugames 12y ago
Yes, the SO works for one of them. The employee discount can go up to 50% for hotels and pretty much nothing on flights.
jessriedel 12y ago
Does anyone know why there's such a huge disparity in these different types? I'd think the revenue would start getting driven down toward the value added, and I can't imagine the value added by a website varies so much between plane tickets, car rentals, and hotel booking.
- brianpgordon 12y ago
  Airlines are already operating on such razor-thin margins that it's not surprising that Priceline can't extract much profit from those deals.

dingaling 12y ago

The origins of Expedia "And Bill said, ‘No let’s start it inside Microsoft. And if it wants to be free we’ll consider it.’" http://www.wired.com/2013/06/rich-barton-empowers-people-and-picks-fights-very-profitably/ http://www.wired.com/2013/06/rich-barton-empowers-people-and...

encoderer 12y ago
Rich Barton went on to found Zillow. He's cut an impressive path.

bt3 12y ago

It seems as though the whole travel industry is excited about the news: EXPE - 90.45 +15.64% OWW - 11.65 +21.05% PCLN - 1092.83 +3.09% TRIP - 82.03 +21.94% Worth noting as well that the deal was based upon 115M Orbitz shares @ 12/ each, which makes it a $1.38B. The $1.6B represents the enterprise value.

stevenj 12y ago

In all cash deals like this, is there just a bank wire transfer that's made in the purchase amount from one company's account to the other's once everything has been approved and the deal has closed?

giarc 12y ago
I can't answer your question directly, but I'm reminded of a story a friend once told. He was a new lawyer at a large firm. He was helping with a large deal and the bank couldn't get a hold of the lawyers listed above him. The bank called him and said "Is this $12.5 million transfer approved?" Do which he said yes, and 1 second later, 12 million dollars was moved from one account to another. So perhaps, with some authorization calls, it is as simple as a wire transfer.
- chx 12y ago
  My brother once put in a 1M EUR transaction instead of 1M HUF he wanted and it went through without a hitch... even though his account didn't have that sort of money or even anything close to that. That was weird and disconcerting.
- ToastyMallows 12y ago
  Geez, to have that authority. Crazy.
Elessar 12y ago
A simple SWIFT transaction (wire payment) is generally enough, though in order for the actual transaction to move, there are confirmation and settlement procedures. All of which depend on the company and bank policies (for example, American Companies are all by law offered the option to use 4-eye verification processes to prevent a single person from making a tx, two to confirm etc etc). Giarc's story is the confirmation process, likely being chased down by the back office at the bank as they go through the various procedures that minimize fraud and mistakes involved when moving large sums of cash. If FX is involved, then they'll likely need to purchase the sum in a different currency (if they do not already have cash in that currency) and use the result to settle in another bank account. For example, an American company purchases 15 million euro to settle in a German bank account that belongs to the purchased.

tiffanyh 12y ago

3 weeks ago, Expedia acquired Travelocity for $280M. http://dealbook.nytimes.com/2015/01/23/expedia-buys-travelocity-for-280-million-in-cash/?_r=0 http://dealbook.nytimes.com/2015/01/23/expedia-buys-traveloc... This Orbitz deal ($1.6B) makes the Travelocity deal ($280M) look cheap.

xasos 12y ago
Aren't Expedia, Orbitz, and Travelocity some of the biggest online travel sites?
- burnte 12y ago
  Yes, but Priceline is bigger, hence the buyouts to be able to compete better.
  - martin1975 12y ago
    It's the Shatner factor.
breckenedge 12y ago
I need to check my sources, but I believe the Travelocity deal excluded much of Travelocity's technology, it was just a brand-name purchase. Edit, sources: > Sparks was brought in a couple of years ago to turn around the company, which needed a wholesale upgrading of its back-end systems in order to make a go of it, but apparently the transition fell short. [1] [1] http://skift.com/2013/08/22/travelocity-gives-in-sites-to-be-powered-by-expedia/ http://skift.com/2013/08/22/travelocity-gives-in-sites-to-be...
- alecco 12y ago
  Very good idea not to get the mess of Travelocity technology.
- joneholland 12y ago
  Expedia was already powering the Travelocity backend back in 2014 as part of a strategic deal because travelocity had failed to modernize their stack. . The latest acquisition simply bought the brand.

geverett 12y ago

Tis means that hotels in the Us and Europe now effectively have only two partners to consider for distributing their inventory. This means less competiton to drive commissions and prices down. Bad news for the consumer. Good analysis on Skift with more details: http://skift.com/2015/02/12/its-expedia-against-everyone-else-after-orbitz-and-travelocity-deals/ http://skift.com/2015/02/12/its-expedia-against-everyone-els...

aepearson 12y ago

Wait until they buy Homeaway next..

stephengoodwin 12y ago
Homeaway focuses on vacation rentals and is in a very different market than Expedia and Orbitz. It's not out of the realm of possibilities, but Expedia and Orbitz are much closer competitors than either would be with Homeaway.
- joneholland 12y ago
  Expedia syndicates HomeAway listings on their site now.
  - aepearson 12y ago
    At Homeaway's most recent national conference it seemed pretty clear that this was the first step in acquisition.
- aepearson 12y ago
  There is a lot of back story you aren't aware of. This is not an "if" it's a "when". They have been in bed together for years now. This is coming from someone who works specifically in the Vacation Rental industry.
toomuchtodo 12y ago
Or perhaps AirBNB.

acomjean 12y ago

I interviewed at a travel company last year. It was interesting because they didn't do any of the backend booking stuff (for flights), but instead seemed to like to direct you to other sites to book and then take a referal cut if you buy. This was a weird business where the person buying the travel was the product (I didn't like it). Expedia is one of the direct bookers. I use them. The UI is not pretty but functional enough.

petercooper 12y ago
I think Hipmunk (the site founded by some of the Reddit founders) works like that. It's not unusual though. Here in the UK, things like insurance and utilities are increasingly sold in this way (we call them "price comparison" sites). I believe(?) Shazam also makes most of its money by referrals to iTunes and Amazon.
- dot 12y ago
  that is how kayak and tripadvisor make most of their money too. Ever notice how photo galleries for hotels on tripadvisor open new windows? they're making sure you have their cookie when you book it on hotels.com, expedia, booking.com, etc later.

jrochkind1 12y ago

i've been using kayak instead for quite a while now. Expedia bought them yet? Nope, looks like Priceline did. Well, it's still a good site last time I checked.

0505gonzalez 12y ago

Really interesting strategy Expedia has, having these new brands benefit from Expedia's tech stack.

greatquux 12y ago

Anyone know if Orbitz is still built on lisp as pg famously documented so long ago?

itazula 12y ago
A lot of job listings here: https://twitter.com/OrbitzTalent?original_referer=https%3A%2F%2Fcareers.orbitz.com%2F&profile_id=70411733&tw_i=565903637235658752&tw_p=embeddedtimeline&tw_w=405387587155533824 https://twitter.com/OrbitzTalent?original_referer=https%3A%2... A quick scan of the software engineering positions did not, however, uncover any Lisp-related jobs.
SeanLuke 12y ago
ITA is built on lisp. http://en.wikipedia.org/wiki/ITA_Software http://en.wikipedia.org/wiki/ITA_Software Orbitz, along with Kayak and many others, is an ITA customer.

nnoitra 12y ago

So they put their money in bags and give it to them?

niels_olson 12y ago

Is Orbitz still running lisp code?