Trip.com: Resurrection of a Brand as Orbitz Enters Multi-site Search Fray

Orbitz will shortly announce the re-birth of the Trip.com brand as a multi-site travel search engine akin to BookingBuddy.com, (an Expedia property) TripAdvisor (also owned by Expedia) Igougo, (a Travelocity property) and TravelZoo's Super Search product.

According to senior Orbitz executives we spoke with, Trip.com is an effort to continue to "maximize the revenue per visit" of "each customer that walks through Orbitz' front door." "Some consumers have indicated a strong preference for these types of comparison sites" and Orbitz will now offer visitors the choice of how to shop - an area "historically under served by Orbitz."

Orbitz is betting that offering consumers more choices in how they search and buy will lead to increased total revenues and better traffic efficiencies. Orbitz will now be able to convert visitors on either a transactional basis (by selling at Orbitz.com) or on a media basis (by referring to another site.)

Trip.com supports air, hotel, car, vacation packages and cruises and compares numerous sites including both meta sites (fly.com, bing.com and kayak.com) as well as traditional Online Travel Agencies (OTAs) such as Travelocity, Hotwire, Expedia and of course, Orbitz and Cheaptickets.

Thus far, the only supplier direct link is to IHG's Holiday Inn. Three reasons are probably driving the limited supplier direct presence. First, Trip.com has just launched (interestingly without a "beta" tag) so many relationships are probably not yet in place. Secondly, particularly on the hotel side, many suppliers do not currently have an API (a structured way for two systems to talk with each other) that is easily searchable. Finally, Orbitz indicated that "unlike other sites," Trip.com will not follow the "strategy of offering complementary link-offs" to supplier sites.

Trip.com does a really nice job of allowing the user to select multiple sites at the same time on the search page and search all at once vs. some competitors which force users to click each site one at a time.

Trip will be operated as part of Orbitz Worldwide's Away Network which includes Away.com, Gorp and Outsideonline.

Columbus, GA: 2, Expedia:0

The Georgia Supreme Court ruled against Expedia in a case brought by the City of Columbus relating to hotel occupancy taxes. In the 4-3 ruling, the court upheld a lower court's ruling that Expedia needed to charge (and remit) the occupancy taxes on the full rate charged on Expedia.com rather than the lower net rate which was actually remitted to the hotel.

This is the third case that has gone against Expedia in recent months with similar rulings in Washington State (albeit a consumer class-action suit) and Anaheim, California.

An example which shows the issue at hand:

Room rate on Expedia.com: $100.00 (Net rate: negotiated between Expedia and Hilton $80.00)
Room rate on Hilton.com: $100.00
Columbus, GA tax rate: 7%

In this scenario, the consumer would pay $107.00 at either Expedia or Hilton.com Hilton charges $107 all-in as does Expedia to maintain rate parity between the two channels. Expedia labels the $7 "taxes and fees."

However, it gets interesting when you look at what is going on behind the scenes. In the above scenario, Columbus gets $7 ($100 x .07) from the Hilton.com booking. With the Expedia booking, Columbus gets $5.60 ($80 x .07) since occupancy taxes are collected (and remitted) based on the revenue flowing through the door of the actual hotel. The hotel never sees the $100 rate - just the $80 wholesale rate and remits taxes on same.

Expedia retains the resulting $1.40 difference as the fees portion of the "taxes and fees."

But here is the rub - this is the way tax has been collected on net hotel rates for years - long before the advent of the Internet. Since way back when Liberty Travel practically invented the travel package, hotels have always paid on the money that flowed across their thresholds. And consumer sales tax is not collected on the wholesale price of goods but the retail price. It seems that a "new" distribution channel has been singled out because of its own success.

Municipalities and states should give a second thought to going after the OTAs - after all, they are critical to bringing in tourist dollars - biting the hand that feeds you may not be such a smart idea. Let us know when Columbus, GA finds another marketing vehicle with as much reach and breadth as Expedia.

We'll see where this one goes - indeed, the appeal would rest with the United States Supreme Court.

Travelocity and Orbitz match Expedia but Differences Remain and Orbitz Adds a Twist

So, today is June 1st and not surprisingly, Orbitz and Travelocity have fallen into line and matched Expedia's air booking fee removal which was announced last week. However, as usual in this game, plenty of nuances remain between the different sites.

For one thing, Orbitz and Travelocity have not eliminated *all* booking fees - they still charge them on multi-carrier itineraries and trip which originate outside the United States, Canada, Mexico and the Caribbean. So, intrepid travelers who use Travelocity or Orbitz to book a flight from Moscow to Minsk will still get hit with a booking fee on Orbitz and Travelocity. Similarly, let Orbitz or Travelocity find a great fare using American one way and Delta returning and you'll also get hit with a booking fee. Odd, because these kinds of tickets certainly don't cost either Orbitz or Travelocity more to sell or process than a regular old domestic ticket to Chicago.

(As an aside, Priceline does not sell international point of origin tickets)

Orbitz is still charging $30 (over and above anything the airlines charge) to cancel or change a ticket they sold. Priceline has not charged these fees for years and Expedia eliminated them last week when they announced they were removing booking fees for good. Travelocity also does not charge these fees.

Orbitz is showing another new feature for air consumers - it is a little hard to find, but Orbitz is now allowing bookers to cancel a ticket without penalties until 10PM CT the day after it was booked. This feature (which has been long available to traditional agents who are able to simply void tickets before they are fully reported to the airlines via ARC) is new to the online travel agency world. While the websites have always been able to do this, none have ever used it as a marketing tool. Several airlines (Delta, United come to mind) have similar features but this is one more example of Orbitz delivering more value to consumers. As just pointed out by Travelocity, they too offer this feature. Very cool but again, pretty well hidden - and it seems like a key differentiator from supplier sites.

And, if none of the OTAs are charging fees, do all the "fee chop," "no fees," and "booking fees eliminated" marketing messages really mean anything to anyone anymore? These are starting to sound a little like "Best Rate Gurantees"

Expedia Does Away With Air Booking Fees for Good and Drops Others as Well

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.....

Orbitz Extends Price Assurance to Hotels in Latest Chapter of OTA Battle Royale

This morning, Orbitz extended its Price Assurance program to hotels booked through the site. Price Assurance offers consumers a cash rebate if the hotel stay is booked by another Orbitz customer for the exact same dates and room category. This is true innovation from an OTA - no one else has a similar product save start-up Yapta.com

Orbitz claims the program has been highly effective on the air side in driving customers over the purchase hump. Clearly, Orbitz is expecting similar results on the hotel side, particularly when coupled with the hotel fee cuts promotion which is also underway.

Of note, there is a catch. Another consumer must actually book the exact same stay - if the hotel drops rates but no one else books the exact same stay (same check-in, check-out, room class etc) you are out of luck.

Price Assurance for hotels is likely to be far less costly for Orbitz than the similar version offered for air. Assuming a hotel drops the underlying net or merchant rate, (depending on Orbitz's contract) they may be able to rebook at the lower net rate and simply pass the difference back to the consumer. Even if the hotel does not allow a rebook, Orbitz can still probably pay a significant portion of the cash rebate back to the consumer out of the gross margin associated with that stay. On the air side, Orbitz is simply paying out cold hard cash - there is little, if any, chance to go back to the airlines and rebook at the lower price and, alas, there is very little gross margin on air...

New EXPE Board Member - Chairman of Amadeus - really!

In a small 8K filing late last month, Expedia added Jose Antonio Tazon to the Board of Directors. Tazon replaced Expedia long-time insider and fellow European Simon Breakwell who left the board.

Breakwell leaving isn't particularly interesting aside from the fact that he was one of the "old guard" from earlier times - he joined the company in 1997.

But the Chairman of one of the big three GDS systems joining the board is interesting indeed. Clearly, Tazon brings a wealth of European knowledge and insight to Expedia - which could be crucial as Expedia continues to slug it out with the likes of booking.com in particular. Amadeus also brings deep experience in serving both airlines and travel agents alike.

But Amadeus' market strength comes from the European Markets - not North America where Expedia's strengths lie.

Amadeus, on the other hand, unlike Travelport and Sabre, has limited experience in the direct-to-consumer online travel agency space. From a consumer marketing standpoint, clearly Expedia sets the bar.

We doubt this is a prognostication of further consolidation within the travel distribution space (yet) but Expedia and Amadeus certainly have plenty to learn from each other.

Travelocity goes Hotwire! New Opaque Product Launched

We are not quite sure how we missed this one, but Travelocity has launched a new opaque product (a la Hotwire or Priceline's name your own price model) within their current hotel product.

There does not seem to have been any fanfare associated with this launch - nary even a press release but then again, Travelocity may have been a little occupied with the ongoing booking fee battles to focus on this product launch.

The product is the same in name and offering as those offered on Travelocity's sister site in Europe, Lastminute.com

Consumers click on the link above (which could use some work, by the way - what is that hanging edge of the "top secret" logo on the far right?) and are directed to the page shown below.

Not unlike Hotwire, star ratings, amenities and a fixed (rather than name-your-own as at Priceline) price is shown. Traveler reviews are masked as well as any other descriptive data that would enable a potential customer to identify the hotel.

Unlike Hotwire and Priceline, however, the location of your mystery hotel (often the most important part of buying a hotel!) is somewhat hard to identify, to the point of silliness. The hotels above were listed as being in "Chicago" rather than a specific area or neighborhood of Chicago. This makes it pretty tough for consumers to make an intelligent choice - who wants to end up at O'Hare if you have a meeting downtown? Compare Travelocity's map with Hotwire's:



























And then there is the supply issue. Things are early for Travelocity - we had a choice of 3 hotels vs. Hotwire's 34. Because of Priceline's opacity, it is impossible to know how many hotels Priceline has but, based on our experience, it is usually at least as many as Hotwire.

That said, assuming the suppliers can live with it, more choice is always good for consumers and we expect, particularly in these times, that Travelocity will be able to rapidly add more inventory - again, assuming hoteliers buy into the product.

Delta and Northwest Bring Back 500 Bonus Miles for Booking Online - Are the OTAs Finally Stealing Share Back from Supplier Sites?

Well, its been nearly six weeks since the OTA fee-removal frenzy began. As you will no doubt recall, The pre-fight (or should we say pre-flight) warm-up match was nearly two years ago when Priceline and Hotwire dropped air booking fees. In the Main Event, Round One, Expedia dropped air booking fees, then Travelocity quickly followed suit and Orbitz finally joined the party a week or so later. Round Two was kicked off when Orbitz dropped booking fees on hotels which was quickly matched by Expedia.

But now, the question is, is it working - are the OTAs actually grabbing growth back from the supplier sites?

Maybe so - Today, Delta (and Northwest) both returned to offering 500 mile booking bonuses on their websites - something we have not seen in nearly two years. The airlines (in their usual lock-step fashion) first lowered the bonus from 1000 miles to 500 and then eliminated them all together. It is billed as a temporary promotion so we'll see what happens. If the airlines operate as they usually do, we'll have bonus miles back at all the supplier sites by the end of the week. It could be just a broad attempt to stimulate bookings but we doubt it - the airlines have gotten much smarter in recent years in how they target demand stimulation offers - this is a broad swipe.

And why not? Given the new pricing parity, airlines have little else to offer other than websites that are generally sub-par when compared to the content, functionality and service offerings that the major OTAs have built out. Millions of consumers have paid $7 for these services for years - it goes to figure that even more would opt to buy from an OTA given price parity.

Comically, Delta's PR team seems to have missed out on a few of the changes in the OTA world given the first point they trumpet regarding booking at Delta.com is no booking fees. And the 2nd point is a best fare guarantee which still falls FAR short of the Orbitz offering.

OTAs offer many different airline choices, combinations of different carriers for the same trip which often results in a lower fare, money-saving air+hotel package products, often superior en-route service and, in the case of Orbitz, even assurance that if the price goes down, you'll get your money back - something no airline offers. Maybe the airlines have woken up - it looks like at least Delta and Northwest have...

OTA Slug Fest Continues: Expedia Removes Back-end Mark-ups Previously in "Taxes/Fees" to Match Orbitz

The OTA slug fest over booking fees continues today - Expedia has apparently (and quietly) stopped adding additional fees into the "taxes and fees" section as a result of Orbitz removing them yesterday. Expedia claimed to the press they would remain competitive and, indeed, they have.

Until now, while the "base" price of a hotel room on Orbitz, Travelocity and Expedia (and supplier sites) was usually the same, the OTAs often added additional fees into a murky line during the booking process labeled "taxes and fees." Consumers didnt pay much attention to these fees, assuming that they were not optional or a subject of competition. All that changed yesterday when Orbitz began breaking out the total all-in price on the first search results page - something even the hotel supplier sites don't currently do.

Yesterday, we shared the following price comparison which clearly showed the differences between the OTAs (and supplier sites) when the "all-in" price was compared:

Hilton.com $253.71
Orbitz.com $253.10
Priceline.com $253.76
Travelocity.com $262.46
Expedia.com $287.83
Hotels.com $287.83

Today, pricing seems to have equalized across the channels with Expedia coming in line with the competition. Consider the Paramount in New York for this Sunday night:

Paramount website $151.40
Orbitz.com $150.80
Expedia.com $150.07

(Note: Priceline was $299 and Travelocity was $160.33 showing the importance of shopping around - but that isn't the point here)

Or consider the same Hilton New York on Sunday, May 10th:

Hilton.com $162.31
Orbitz.com $161.94
Expedia.com $162.23

What is critical is that Expedia has effectively taken a hatchet to their margins. The difference could be as much as a 12 point drop in the Hilton example above. Clearly, Expedia is not about to cede share and is determined to remain competitive - the open question is what the effect will be on Expedia's hotel margins.

Next Round in the Online Travel Agency Fee Wars:: Orbitz Cuts Hotel Booking Fees

Orbitz fired off the latest salvo in the continuing war between the Online Travel Agents (OTAs) by removing the somewhat hidden booking fees that have pervaded the industry's merchant model. These booking fees have typically been included in the "second step" of the booking process after the consumer clicks on the rate at the hotel they wish to purchase. The fees have been bundled together with taxes in a single "taxes and fees" line without delineation to the consumer on which portion was/is taxes going to the government and which portion is fees going to the OTA.

This is a page right out of Priceline's play book but with a twist. PCLN eliminated the fees on non-opaque (meaning NOT name-your-own price reservations) several month ago under their "Fee Chop" moniker but only shows the "all-in" price when the consumer clicks to book. Orbitz, to their credit, is showing the full price, including taxes on the first page - something even Hilton.com does not do.

We sampled a room for tonight, Wednesday at the Hilton New York to see how the big OTAs and Hilton.com compared. As expected, every site we tested came back with the same initial price: $219. However, from there, prices diverged widely when the "all-in" price was compared:

Hilton.com $253.71
Orbitz.com $253.10
Priceline.com $253.76
Travelocity.com $262.46
Expedia.com $287.83
Hotels.com $287.83

Remember, these are the fully-loaded prices off the same $219 base room rate. Wow! Quite a difference indeed.

Obviously, Travelocity, Expedia and Hotels.com are adding some significant revenues under the guise of "taxes and fees" - often more fees than taxes!

Orbitz is clearly looking to strike Expedia and Travelocity where it hurts in their most profitable segment - hotels. The question is, will consumers notice? After all, all of the OTAs have had these "hidden" fees for years - with few complaints from consumers. All of the competition has been on the first page - ensuring that the first rate consumers see for a hotel is competitive.

And this is yet another "temporary" promotion - only for bookings made between now and July 15th. Will it last longer? Priceline's Fee Chop certainly has.

And there is still that little cancellation fee that Orbitz dings consumers for. Priceline and even Hotels.com have long removed the $25 cancellation fee they imposed above any fees the hotel itself might have charged. The $25 cancel fee lives on at Orbitz, Travelocity and Expedia. Will this be the next frontier in the race to be the most "consumer friendly OTA?"

Delta joins AA in Suggesting that OTAs and Travel Agents Should Pay for Content

If you listened to Delta's Q1 earnings call this morning, you heard some interesting commentary on the future of distribution according to Delta.

DL management echoed American's CEO's suggestion on their call last week that the time would come when OTAs and agents would pay the airlines for their content. Interesting how the airlines can have these "open" discussions in their earnings calls, isn't it? We've been following the commentary over on Dennis Schaal's blog but this was too rich to pass up without a few thoughts of our own!

Of note, DL stated that "TMCs have an important role to play" and seemed to imply that their main target was the OTAs particularly when DL described the "value we provide vs. others" online. Maybe so, Orbitz's Price Assurance which offers consumers a refund when fares decline seems like a pretty good value. The same can be said for the multitude of air+hotel packaging options that the OTAs provide to consumers. And many consumers would also vote Orbitz's TLC in-route support to be far superior to many airline's offerings. And multiple airlines? Try booking a multi-carrier trip on Delta.com or Continental.com. OTAs are all about offering consumers choices and comparison opportunities - things they do quite well.

More interesting, however, was the suggestion that "OTAs should pay for [airline] content the way they do for hotels" Hmmmm. Obviously, someone at Delta has not taken a quick look at hotel distribution costs - nor drivers of OTA profitability. Newsflash: OTAs don't make any money selling airline tickets! They make it selling hotels. And they don't pay hotels - quite the opposite. Can you imagine the horror if someone at Delta knew that many chains are paying Expedia/Travelocity/Orbitz in the mid-teens for distribution? And what of independent hotels? Considerably more.

And finally, DL mentioned that Delta.com was driving ~ 37-38% of Delta's revenues - great news indeed. But they also estimated that the OTAs were providing in the area of 30% of Delta's revenues - wow is all we can say on that one.

Orbitz finally falls in line with no booking fees: OWW

This morning, Orbitz matched competitors Expedia, Travelocity and long-time forerunner Priceline in removing booking fees on airline tickets. The duel continues. Orbitz, like Expedia and Travelocity, is billing it as a "promotion" through May 31st but as we've stated before, we don't think that putting this genie back in the bottle will be easy come late May.

Wisely, Orbitz excluded tickets that utilize a combination of airlines from the fee waiver. This is laudable because these kinds of tickets are difficult, if not impossible, for the supplier sites to sell. (when was the last time you bought a Delta ticket at United.com?) Also, because of Orbitz's strong ITA Software search engine backbone, Orbitz often provides lower combinations of multiple carriers than Expedia, Travelocity or Priceline. This may enable Orbitz to preserve at least some of their fee revenue - time will tell how much.

We also like that Orbitz is weaving their innovative Price Assurance plan (which protects consumers from airfare decreases after buying a ticket) tightly into the no-fee marketing. This provides a one-two punch vs. Expedia and the supplier (airline) websites which do not have a similar program.
But, we do worry about the costs associated with both of these efforts. Consumers apparently appreciate Price Assurance, but these payments come directly from Orbitz - not the airlines. Absent much or most of the $7 per ticket fee revenue that Orbitz has enjoyed, this program may get expensive quickly.

Similarly, as previously discussed, a much larger portion of Orbitz's earnings come from booking fees. (Citi estimates nearly 60% for OWW vs ~10% for EXPE.)

Orbitz's long-time focus on air (at the expense of higher margin hotels) is finally coming home to roost - OUCH or OWW may be perfect now more than ever.

The continuing OTA drama: Priceline jumps into the "me too" promotional game

This morning Priceline announced an airfare price reduction protection promotion. Similar to Orbitz's Price Assurance (which is not a limited time promotion) Priceline's Pricedrop Protection offers consumers a rebate back on their airline tickets if another Priceline customer books the same flights, dates etc at a cheaper price prior to travel.

We'll see if this "promotion" becomes a permanent feature or not but we bet it will - we've heard it has been highly successful for Orbitz in retaining customers and improving conversion rates.

In a fairly direct slam on both Travelocity and Orbitz (the latter has yet to announce a reduction in booking fees) Priceline claims "The new promotion, which is free to consumers, is ground-breaking because it makes priceline.com the only major online travel agency to offer no booking fees and automatic Pricedrop Protection on its published-price airfares and vacation packages." This message is consistent with Priceline's value consumer positioning - it also increases the pressure on Orbitz to make a move with regard to booking fees. Someone else (who doesn't have booking fees) now offers pricing protection.... And what of Yapta?

Another holiday, another rumor that Google is interested in buying Expedia

Remember last April Fools Day when shares (and options) of EXPE shot up on rumors that Google was interested in buying Expedia? Well, yesterday was St. Patricks Day and yet again, the rumor mill was active that Google was going to take out Expedia.

Come on folks, this is just silliness.

First of all, while EXPE is clearly firing on all cylinders right now, its hardly the high-growth, new business model type of business that Google typically buys. Expedia is a great company for sure, with a great brand and great leadership but it is a big travel agency at heart - hardly very Google-esq. Of course Google would like to be deeper into travel but this isn't how (if they even decide to) they will do it. Just look at how things worked out for Yahoo! and Farechase as an example - not that we would hold up Yahoo! as an example of how to do much of anything right.

But more importantly, travel is one of Google's largest ad sales verticals. Do you really think they would potentially jeopardize the huge revenue stream from Expedia's current competitors (e.g. Priceline, Travelocity) and the suppliers themselves to own Expedia? Not a chance.

True, Google's Head of Travel, Rob Torres is an Expedia veteran and even still lives in the Seattle area, but we doubt he is looking to return to his old commute to Bellevue.

Travelocity to match Expedia on no booking fees

Today's Wall Street Journal is reporting that Travelocity will announce they are matching Expedia in removing booking fees for published airline tickets until May 31st.

As we previously posted, we don't think the removal of booking fees at Expedia (or Travelocity) is a temporary promotion anymore than it was for Priceline and Hotwire. Adding fees back in is hard - really hard.

It has taken Travelocity a week to digest this dramatic change in the landscape that has occurred and now they have gotten on board. And now Travelocity has matched Expedia - reminds us a little of how the airlines all miraculously match fares and add-on fees. This is a seismic change for the OTA industry - Expedia has put all of their chips "in."


Orbitz will be forced to match the fee reduction as well - the customer overlap is now just too large to ignore. According to Nielson/Net ratings data from 2007, well over 50% of visitors to Expedia also visit Orbitz or vice-versa. We doubt that some of the airline product innovations that Orbitz has developed (Orbitz TLC, Orbitz Pricematch) will be enough to convince finicky customers (just look at those retention rates!) to book with Orbitz vs. Travelocity or Expedia. If only Orbitz had spent as much time working on hotels as they have on air......

Expedia's bold move into the land of no air booking fees

This morning Expedia announced a new promotion offering free nights at 700+ hotels based on a three, four or five night minimum stay. This isn't particularly new or exciting as Expedia has long offered hotels this capability. What is earth-shattering is the reduction on booking fees on airline tickets.

Priceline started this trend over a year ago on what was at the time called a special promotion. It was quickly matched by Priceline's key competitor Hotwire (which is owned by Expedia.) But Pricline and Hotwire both had little to lose as neither one sold very much published airfare anyway. And, getting people to buy air, even without making any profit, was key to getting people to buy highly profitable hotels and cars in follow-on transactions.

But now Expedia has followed. This is billed as a promotion, but we would not be surprised to see it become permanent, just as it did at Priceline and Hotwire.

Clearly there will be winners and losers.

Consumers are the big winners as they will gain a major distribution outlet for fare shopping and comparing that will now have prices equal to the supplier sites.

We don't think Priceline has too much to fear because while their sales of air have grown significantly following the removal of fees, they are still a much smaller player with the majority of their profits and revenues coming from the sale of hotel rooms But clearly, Expedia has taken notice.

The biggest loser in this is probably Orbitz. Orbitz derives a much bigger share of their revenues and profits from these fees. In fact, Citi analyst Mark S. Mahaney calculates that Orbitz (OWW) derives nearly 60% of their operating profits from these fees vs. just 10% for Expedia. Expedia's strong stand-alone hotel product and robust cross-selling may enable it to make up for the loss of booking fee revenue on other products.

And another question mark will be the meta-search sites such as Kayak, fly.com and Tripadvisor.com. Kayak in particular depends on significant revenue streams from its partnership with Orbitz. If Orbitz's fee goes to zero, it will be hard, if not impossible, for Orbitz to continue paying Kayak a referral fee.

Which brings us back to an interesting question: Is there more than meets the eye here with Tripadvisor's new air meta-search product? (Note: Expedia also owns Tripadvisor) If Expedia is now at partity with supplier sites (e.g. Delta.com, AA.com etc) on a meta-search site, they stand to benefit from a substantial up-tick in traffic......