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Expedia’s acquisition of Orbitz points to consolidation of mobile travel sector

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February 13, 2015

Expedia's umbrella of acquisitions is widening with Orbitz

Expedia’s umbrella of acquisitions is widening with Orbitz

Expedia’s announcement of its acquisition of fellow booking company Orbitz arrives on the heels of its recent integration with Travelocity, suggesting that the time has come for travel brands to consolidate in the mobile sector and combine services for a cohesive planning and booking experience.

In a bid to keep up with Priceline’s growing empire, Expedia will now have HotelClub and CheapTickets under its umbrella, thanks to the Orbitz acquisition. The news caused Orbitz shares on the New York Stock Exchange to skyrocket by more than 20 percent.

“The most important implication this has for the digital travel sector is that we must stay focused on the digital experience we are providing for users,” said Daniel Farrar, CEO of Switchfly, San Francisco.

“Continue to provide the best experience with leading technology. Create personalized offers that make sense in context, and engage with users at the right time through the right channel,” he said.

“Those are the primary, most actionable goals.”

Heading the mobile travel sector
Expedia’s two newest acquisitions will likely give it a leg up in the mobile travel sector, especially as it allows the brand to consolidate assets. The integration may be a plus for Orbitz, as reports claim that the brand was suffering from overly relying on flight bookings for profit rather than hotel bookings, which are typically more lucrative.

Expedia’s experience in the hotel industry can augment Orbitz’s leads in the flight sector.

ORBITZ.COM APP
Orbitz’s experience with hotels will augment Expedia’s brand

The oversaturation of booking apps has led experts to posit that brands will need to evolve if they want to keep their stake in the travel market (see story). Technologies such as Apple Pay and Touch ID may become requisite for those trying to gain new consumers.

While the plethora of options is certainly beneficial for consumers seeking to snag the best deals, it becomes trickier for marketers, especially newer brands, aiming to nab a slice of the lucrative mobile travel sector.

Expedia versus Priceline
 This acquisition offers Expedia more leverage as it competes against another top corporation in the travel industry, Priceline. Expedia will likely be able to retain a majority of Orbitz’s regular customers, but has not commented on its exact plans for its recent acquisitions of Orbitz and Travelocity.

Marketers can bet on Expedia placing an even higher focus on mobile, however, as more millennials turn to their smartphones and tablets for browsing potential vacations and more importantly, booking them.

Priceline.com recently commissioned a survey, undertaken by Wakefield Research, that displayed the volume of last-minute getaways booked on mobile devices is rapidly increasing (see story). Many consumers are also attracted to impulse buys on mobile, thanks to many marketers offering streamlined one or two-step checkout processes.

orbitz other 420
Expedia is likely to ramp up even more mobile offerings this year

The survey found that 49 percent of Americans that did not take advantage of a last-minute getaway in 2014 regret not doing so, providing a massive opportunity for travel marketers to disrupt the space and leverage holidays and flash sales to target those consumers.

Ultimately, with Expedia and Priceline leading the pack, any travel brand not placing a major focus on mobile will be at a severe disadvantage. 2015 is likely to be a determining year in terms of consumers selecting their favorite hospitality marketers and possibly edging a few others out of the crowded space.

“Mobile is no longer a trend, it’s a way of life,” Mr. Farrar said. “I would be surprised to learn of any company not rolling out additional mobile features.”

Final Take
Alex Samuely is an editorial assistant on Mobile Commerce Daily, New York

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Alex Samuely is staff writer on Mobile Commerce Daily, New York. Reach her at alex@mobilemarketer.com.

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