In Online Travel, Size MattersFour Questions about the Future of Online Travel Agencies
With Expedia swallowing Travelocity, Orbitz considering a sale, eDreams Odigeo in transition and Priceline stoking fears around the world, every online travel company and hotelier must confront a rising strategic reality: It's become a two-horse race, and the leaders are pulling ahead of the pack.
Online travel agencies (OTAs) are the fastest growing distribution channel globally, and the two largest, Priceline and Expedia, outpace the market by no small margin. Combined gross bookings of the two jumped from 38% of global OTA sales in 2011 to 47% in 2013 (see Figure 1). And the continued, super-charged organic growth of Priceline's Booking.com, as well as Expedia's assumption of the Travelocity volume largely in 2014 (and Australia's Wotif), mean global share of the two leaders will only accelerate in 2014 and 2015.
The rest of the OTA market is growing, but at a pace far...