Livewire: Travel Search Sites Look for Bargains on
| Author: | By Peter Henderson |
| Submission Date: | 2004-10-09 |
| Website: | |
| Email: |
LOS ANGELES (Reuters) - Web sites promising to find the best travel deals have online travel agents wondering if they have a new friend or enemy.
For consumers, however, choices are rising, as the new search companies take a different approach to finding travel bargains on the Web.
Sites like Sidestep (http://www.sidestep.com), Yahoo's new Farechase (http://www.farechase.com), Mobissimo (http://www.mobissimo.com) and online comparison shopping firm Nextag (http://www.nextag.com), work like referral services, combing the Web for bargains and showing customers where to find them.
In return, the sites that get the business generally pay finders fees to the search companies and process the transactions themselves.
That compares with the big three Web travel services, InterActiveCorp's (Nasdaq:IACI - news) Expedia, Orbitz Inc.(Nasdaq:ORBZ - news) and Sabre Holdings Corp.'s (NYSE:TSG - news) Travelocity, which aim to offer one-stop shopping by finding and selling hotel rooms, airplane tickets and rental cars. They also dwarf the Web travel sites, although the latter are growing quickly.
Results vary from search engine to search engine, and even from search to search, and the search sites do not offer packages of travel or the detailed information, such as pictures of hotel rooms, that the established sites have.
"We can't beat them at their game, and we know that," said Sidestep Chief Executive Brian Barth. But he says the system, which compares prices in real time, is better for suppliers and customers. "We're sort of hitting online travel 2.0 now."
The search companies sometimes find bargains that do not show up on the big three, such as Southwest Airlines flights that appear on Sidestep. Southwest is known for keeping its fares only on its own site, but in the Sidestep model, customers have to go to Southwest.com to purchase.
Some hotel and airline companies appear to feel less threatened by the search firms than the big three travel agents, seeing them more as referral services than competing brands.
"We are not a travel agent. All we want to do is present alternatives to shoppers," said Rafael Ortiz, head of marketing at Nextag, and a co-founder of the company, which began as a way to compare prices on electronics from different retailers.
Each company has a slightly different take on what users want.
Sidestep offers a downloadable toolbar on one side of the screen and then brings up the travel supplier Web site on the other side. It also has a traditional Web site, which is the way Nextag, Mobissimo and Farechase have gone on test sites.
The reaction of the big travel sites has been mixed.
Orbitz works with Sidestep and its airline fares often pop up as top deals, while Expedia regards them as competitors.
"We don't believe they add value," said Expedia North America President Steven McArthur.
"As the online travel strategy matures, it has to move beyond 'stack it high and sell it cheap,"' he said in an interview, arguing that search's main benefit was finding the cheapest deal when customers wanted more.
Sidestep says its costs to suppliers is about half that of the online travel agents. McArthur said the business model made him "scratch my head," although some analysts see the online travel agents as the losers.
Travel operator Cendant Corp.'s (NYSE:CD - news) purchase of Orbitz this month left many debating the issue.
Barth said that Yahoo's purchase of Farechase proved search was not going away.
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