Success, Brian!

– Stuart (former SVP Packages and CMO of Expedia — emphasis on *FORMER* ))

It certainly seems the OTA brass is downplaying the immanent threat the travel meta-search has on the online travel industry to the public. I can assure you behind close doors it’s a different story. It is true that meta only has a small fraction of market share, but they are growing rapidly and are making moves to position themselves as the next wave of online travel. How can the OTA’s not be worried? Yahoo purchases FareChase which is planning a big ramp up in ’06. AOL partners with Kayak to create Pinpoint Travel. SideStep launches a co-branded travel search section with Amazon. Google launches the “booking buddy” type model within their search results when a user searches for Departure and Arrival cities. The networks certainly seem to see the light and possibly the future of internet travel.

The meta-search model seems to make perfect sense. The suppliers want to own the consumer relationship. Through the OTA model, they don’t get this. From a technology and user experience standpoint, they are certainly behind the times but gaining ground quickly.

Expedia and Travelocity have primarily shunned relationships with the travel engines. Orbitz has taken on the opposite approach and has embraced the model fully. They have locked up direct relationships with just about all the major players in the aggregator space. It can be argued that SideStep wouldn’t be close to the position they are today without Orbitz becoming part of their supplier set back in the toolbar’s early days. Without SideStep’s success, where would Kayak, Mobissimo, and FareChase be today? Some may argue that Orbitz is the Julia Robert’s of the big three OTA’s by “Sleeping with the Enemy”. I think this is an outstanding short-term move to gain market share on Expedia and Travelocity. However, they may have a helping hand in the demise of the current OTA model. The SideStep’s of the world are locking up direct supplier relationships left and right which are making them less dependant on OTA’s results. How long will it be before travel search kicks Orbitz and OneTravel to the curb and goes in for the kill?

The OTA’s are hanging their hats on “Customer Service” and “Packaging Options”. I’m not quite sure how far this is going to take them given the consumers already get service through the suppliers and packaging only makes up 10%-20% of their bookings. It’s going to be interesting to see how this shakes out 3-5 years down the line.