Expedia Hopes Orbitz Acquisition Will Help It Sell More Flights
Photo Credit: Expedia plans on investing more heavily in the complexities of the flight business. Pictured, JetBlue's A321s with Mint business class service feature a Marketplace, where passengers can take snacks and soft drinks for free. JetBlue
Skift Take
Building an online flight business, with all of the inherent complexities, is very difficult work. Expedia Inc. is going to throw some more money at it, and it can make gains while providing an additional differentiator from Booking.com, which offers lodging only.
Expedia, Travelocity, Orbitz, and the Priceline Group have scampered in recent years to increase their hotel businesses in relation to their flight offerings. So yesterday, in explaining one aspect of Expedia Inc.'s pending $1.6 billion cash acquisition of Orbitz Worldwide, Expedia Inc. CFO Mark Okerstrom made an almost-startling admission: "We do love air."
Not oxygen but the flight business, that is.
Orbitz was founded by major U.S. airlines, was understandably flight-oriented for many years and struggled to transition into a hotel-oriented business. When major U.S. airlines all but eliminated commissions in the early 2000s, the online travel world pivoted toward the hotel business, which has much larger margins than flights.
Orbitz did a decent job of reorienting itself toward the hotel business over the y
