Longtime rivals have come to an agreement whereby Expedia will purchase Travelocity for a cool $280 million. With both companies being giants in online travel, newcomers will certainly face a tremendous amount of pressure and challenge.
The two companies have been working hand-in-hand since 2013 at a time when a long-term agreement was entered into. As part of that agreement, Expedia would handle the majority of operations for Travelocity, to include running searches to handling questions posed by customers.
Expedia was first launched back in 1996 under a small division of Microsoft Corporation. Then in 1999, the company went public. Since that time, its popularity in travel has grown tremendously, to include new brands like eLong, Inc., Hotels.com, CarRentals.com, Trivago, and Hotwire.
With this new deal between Expedia and Travelocity, it becomes clear that the industry of online travel has become increasingly more crowded. Two additional companies that hold significant stake in online travel is Orbitz Worldwide, Inc. and Priceline.com. In recent years, these agencies have been joined by even more to include Hipmunk and Kayak, which all scan agencies in looking for the best possible deals on travel.
Because of increased competition, online travel sites have started to offer more and better loyalty programs and discounts for consumers. With the acquisition of Travelocity, Expedia will have another well-established name to add to its brand that obviously gives the company a nice advantage in a very competitive market.
According to Dara Khosrowshahi, chief executive with Expedia, this strategic marketing agreement marries the strong brand of Travelocity with Expedia that offers a stellar booking platform, as well as customer service and supply base.
By moving into this relationship, Expedia will become stronger while providing travelers with better experiences overall. Together, the two companies will make the planning and booking of both pleasure and business travel easier.