Orbitz.com to persist with hotel booking fee cut

Orbitz.com has decided to extend its hotel booking fee cut beyond the July 15 deadline it had originally planned.

The online travel agency did not specify how long it is extending the cuts for. The company said this move follows a successful promotional trial that began in April.

Barney Harford, president and CEO of Orbitz Worldwide, said, the extension of the hotel booking fee cut, the introduction of Total Price hotel search results and the launch of Hotel Price Assurance are meaningful differentiators for customers that separate Orbitz from the rest of the pack.

According to AP, spokeswoman Jeanenne Tornatore said the company will keep extending the fee cuts “as long as we need to” to remain competitive.

Over the past several months the companies have aggressively cut the fees to grab market share and entice recession-weary travelers. 

Recovery

The value of the North American travel market reached an estimated US$389,376 million in 2008 and a further 16 percent increase in volume is expected by 2012, but growth has slowed. 2009 is expected to be the first year this decade for a decline in the total value of travel expenditure and a recovery is expected in 2010, according to EyeforTravel Research’s North America Online Travel Report 2009. 

The study indicates that US travel consumers make relatively good use of OTAs when purchasing hotel products. In 2008, 43 percent of expenditure was indirect. The OTA share of the hotel market has declined with direct to consumer distribution strengthening, but “OTAs are expected to hold a pretty good share”.

The value of direct distribution grew at a 29.8 percent CAGR (2002-2007) and indirect distribution grew at an 18.3 percent CAGR. Although OTAs have lost market share, their value has increased enormously, particularly for the outbound segment.

EyeforTravel Research’s North America Online Travel Report 2009

For more info, contact:
Amy Scarth
+44(0)207 3757545
or info@eyefortravelresearch.com

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