Expedia Buys Orbitz

Expedia Inc is the American based parent company to several global online travel brands including Expedia.com, Hotels.com, Hotwire.com, Trivago etc. Expedia Inc companies operate more than 100 branded points of sale in more than 60 countries. Expedia also power travel bookings for over 10,000 partners such as airlines and hotels, consumer brands, and high traffic websites.

Orbitz Worldwide Inc is a company that operates a web site used to research, plan, and book travel. Recently, Expedia Inc bought Orbitz for about $1.6 Billion in cash to bring on the rival programmers and widen its consumer base. Expedia will be buying both Orbitz portal plus many other brands that it owns. The deal speaks to ongoing consolidation in the market, but also Expedia bigger competitive threat in the form of Priceline, which owns Kayak and other large travel properties, and the fact that perhaps Orbitz saw the consolidation written on the wall itself.

With the Orbitz Acquisition, Expedia would become the biggest player in the travel retail area with a market share of more than 6%, just ahead of Priceline nearly 5% share. That could be bad news for airlines and hotels that will likely lose leverage in negotiations with the sites. Hotels will be under pressure to list their rooms on the sites because of their reach. Expedia in 2014 saw the number of bookings rise 28 percent to 50 Million, and reported a profit of $398 Million.