As we predicted, Expedia today made the removal of air booking fees permanent, matching Priceline and sister site Hotwire's no-fee consumer proposition for the long-term. No word yet from Travelocity and Orbitz but we expect they will fall in line as well. Of note, Expedia has removed all air booking fees - Orbitz is still charging them on multi-airline and international tickets with originations outside of the US/Canada/Mexico/Caribbean.
In so doing, Expedia has removed one of the major obstacles to their continued growth in the domestic US markets - a $7 price differential vs. booking direct.
In addition, Expedia has also removed the annoying "ankle-biter" fees that they used to charge for changes, cancellations etc of air tickets, hotel rooms, cruises and rental cars. Sister site Hotels.com had already removed these fees on hotel room changes and cancels some time ago and Priceline began the trend. These fees were charged by Expedia and were over and above the fees that airlines or hotels charged for making changes or cancels. Rest assured, those fees still exist regardless of booking channel. Funny that as airline continue to race to add fees for everything from redeeming frequent flyer miles to checking bags that Expedia is heading in the opposite direction.
A critical missing element in the press release was any mention of the go-forward plan on hotel booking fees - something Expedia has never messaged to consumers - only to Wall Street. Orbitz is still running with a July 15th cut-off date for their reduced fee promotion on hotels but given Orbitz's site changes to highlight the "all-in" price, we doubt highly that they will back off come mid-July keeping the heat on Expedia and Travelocity. Priceline, of course, hasn't had any of these fees (air or hotel) for some time.....