Expedia is on a buying spree, one that seems to be consolidating the travel website market. The company acquired Travelocity for $280 million last month and acquired Orbitz for around $1.34 billion earlier this week which means that there are now two juggernauts in the market, the other one being Priceline.
The reasons behind this apparent “bigger is better” mentality that Expedia has clearly adopted are still being debated upon but the common consensus is that this is a response to rumors that Amazon and Google will be using their immense powers to enter the market with their own separate products. Many also believe that the rapid growth of home-sharing services like Airbnb has become a serious threat to travel websites. Most likely it’s a combination of both.
You would think that this kind of market consolidation would raise some anti-trust concerns from regulators but, as Dan Reed discusses in an article for Forbes, this likely won’t be the case:
“Oh, to be sure, Justice’s sometimes aggressive arbiters of what is and is not kosher competition will take a look at the Expedia-Orbitz deal. After all, it will reduce the number of major players in the U.S. online travel agency (OTA) market to just two – Expedia and Priceline. And, assuming that Expedia consummates its deal with Orbitz, it will have something near 70% of the U.S. OTA market.”
Basically, online travel agencies aren’t the only place that people can make necessary travel arrangements. Even though Expedia and Priceline now control the vast majority of the market, people can still buy directly from airlines, cruise lines, hotels, etc. which means that the two online travel agency juggernauts are still facing plenty of competition.
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